. I
.1 7!...
0...... x. .0

. I?
{:33 ‘7)
5‘0. x. 5

 

THEM

800)

 

LIBRARY
Michigan State
University

 

 

 

This is to certify that the

dissertation entitled

Making Cities Whole: A Strategy for Reducing
Systematic Bias in Urban America

presented by

Brad Jeffrey Reno

has been accepted towards fulfillment
of the requirements for

Doctoral degree in Political Science

 

Q

; a Major professor E

8-24-01
Date

 

MS U is an Affirmatiw Action/Equal Opportunity Institution 0-12771

 

PLACE IN RETURN BOX to remove this checkout from your record.
TO AVOID FINES return on or before date due.
MAY BE RECALLED with earlier due date if requested.

 

DATE DUE I DATE DUE DATE DUE

APR grimly; #3
913469 '29?

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6/01 c-JCIRC/DateDuepes-ptts

iirii.ill.'

n..." t... n\

 

MAKING CITIES WHOLE:
A STMTEGY FOR REDUCING SYSTEMATIC BIAS IN URBAN AMERICA

By

Brad Jeffrey Reno

AN ABSTRACT OF A DISSERTATION
Submitted to
Michigan State University
in partial fulfillment of the requirements
for the degree of
DOCTOR OF PHILOSOPHY
Department of Political Science

2001

Professor Jerry Weinberger

 

 

 

key

and

is 1.
Hit

5m

int
(0

PO

ABSTRACT

MAKING CITIES WHOLE:
A STRATEGY FOR REDUCING SYSTEMATIC BIAS IN URBAN AMERICA

By

Brad Jeffrey Reno

This dissertation uses liberal political philosophy to examine urban politics. A
key contention is that ideas have consequences and politics maters. The original ideas
and politics upon which the American city was established were those of liberalism. This
holds that people possess natural right and that legitimate government is based on the
consent of the governed and exists to secure the property and the security of citizens.
Citizens are otherwise left to pursue their own happiness following their own rational
self-interest. However, self—interest is a problematic aspect of the human soul. ~When it
is too narrow, exclusive, and short term, people will behave in a way that weakens the
liberal regime. When it is broad, mutual, and long-term, people will behave in a way that
strengthens the regime. Therefore, the key to stable urban regimes is an understanding of
self-interest.

A survey of the history and literature of urban politics reveals that over time, the
urban regime has departed from its founding principles. This is owing to changes in the
intellectual and political atmosphere, beginning with the Progressive Movement and
continuing with the rise of Pragmatic philosophy. This shifi in the fundamental ideas and

politics has resulted in a regime that is at odds with its founding principles. As a result,

ur‘:

the

arg

56

CI

Ii

urban regimes have become fractured and are weakened. Self-interest has tended toward
the anti-social rather than the social variant.

In order to restore cities to greater wholeness, I reexamine the basic ideas of
liberal philosophy. I focus in the relationship between self-interest and private property,
arguing that where there are liberal property laws, citizens are more likely to exhibit the
sort of self that is conducive to stability. Where they suspect property is insufficiently
secure, they will tend to exhibit more narrow, exclusive, and short-term behavior.

In the second part of the dissertation, I examine urban redevelopment policy. I
conclude that when policy deviates from liberal principles, especially in its treatment of
private property, there is a greater tendency for citizens to behave in a way that
undermines the intentions of policy makers. This behavior weakens the regime's ability
to use policy to address problems such as poverty and segregation. However, when
policy is framed in a way that adheres to liberal principles, citizens are less inclined to
undermine it. As evidence I offer a case study of the Michigan Urban Homestead Act,
which was drafted as a deliberate attempt to use liberal philosophy as a guide in policy
making.

I conclude by suggesting ways that future redevelopment programs could follow

the strategy used in the Michigan Urban Homestead Act.

Copyright by
BRAD JEFFREY RENO
2001

To Amy, With Love

ACKNOWLEDGEMENTS

I have incurred a number of professional and personal debts in my graduate
career, beginning with the HE. Earhrt Foundation, which generously supported me
during my coursework. I also received financial support from the John M. Olin
Foundation, the Lynde and Harry Bradley Foundation, and the Michigan State University
Department of Political Science and LeFrak Forum.

My dissertation committee provided invaluable advice during the research and
writing phase. I thank my Chairman, Jerry Weinberger, and the committee members:
Richard Hula, Arthur Melzer, Michael Mintrom, and Richard Zinman. Other Michigan
State University faculty members also offered advice, support, and great insight along the
way including Werner Dannhauser, Ada Finifier, Steve Kautz, Melinda Gann Hall,
Chuck Ostrom, David Rhode, and Brian Silver. Ted Duane allowed me to work as his
teaching assistant for two years, always willing to share his classroom, which served as
the incubator for many of the ideas in this project. I will always remember his
generosity. Furthermore, Donald Anderson, Gerald Moran, and Michael Rosano, were
my teachers at the undergraduate level and are and presently my colleagues at the
University of Michigan—Dearbom. They were kind enough to share many ideas along
the way. Two scholars at the University of Maryland—College Park, Stephen Elkin and
Clarence Stone, were instrumental in first bringing the problems I investigate to light.
They were both kind enough to read and comment on various parts of the work. My
intellectual debt to them should be obvious to anyone who reads this. Perhaps my

greatest debt is to David Leibowitz for first suggesting that I go to graduate school

vi

thereby rescuing me from what would have been a lucrative but miserable career in law.
Thanks are also due to Diana Schaub of Loyola University—Baltimore for sparking my
interest in liberalism and encouraging me to explore the connection between political
philosophy and public policy. Two of my fellow graduate students, Chris Butler and
Renee Agress, were helpful not only in their comments on various aspects of my
argument, but also in reminding me to pause occasionally from research and writing to
develop the social skills necessary for academic success. Finally, I must thank the
several hundred undergraduate students I have encountered while teaching Urban Politics
at Michigan State University. By showing a sincere interest in the problems of city life
and by resisting the comfort of cynicism, they helped me to realize just how important
this subject is.

Much of the research that went into Chapter Two was made possible by a two
year position at the Hudson Institute. There I had the great fortune to work under the
guidance of John C. Weicher, whose patience was surpassed only by his knowledge of
housing and the urban political economy and his generosity in sharing that knowledge
with me.

The Hudson Institute project put me in contact with a number of leaders in
Michigan Government. Governor John Engler, State Senator Bill Schuette, State
Representative Patricia Birkholz, and several mayors, including Flint Mayor Woodrow
Stanley were kind enough to give me personal time and make stafi‘ members available to
me. I am also gratefiil for the shared wisdom of my colleagues on the Partnership for
Redevelopment in Michigan, particularly Bettie Buss, Jeff Homer, Bob McMahon, and

Scott Schrager.

vii

Finally, I must thank my parents for giving me life and teaching me the
importance of living it on my own terms. Thanks also to Mark Davey, not only for
nearly 25 years of friendship, but also for blazing the trail and convincing me that a
dissertation could be completed. Lastly, I must express my gratitude to my wife, Amy. I
alter the customary proclamation that “I could not have completed this project without
you” only to admit that I would not have completed it without you. You remind me every

day why wholeness is important.

viii

TABLE OF CONTENTS

List of Figures ................................................................................ xii

Chapter 1: The Origin of Systematic Bias:
Fractured Ideas About the Fractured City .................................... 1

The Methodological Revolution and the

Fracturing of Ideas ............................................................ 8
Pragmatism and the Logic of Crisis .............................. 12
The Emergence of Regime Theory .............................. 18
Overview of the Present Study ............................................ 26

Chapter 2: Self-Interest:
The Dilemma and the Promise ................................................ 33

Locke: The Problem and the Potential of Self-
Interest ......................................................................... 36

The Moral Dimensions of

Self-Interest .......................................................... 37

The Political Dimensions of _

Self-Interest .......................................................... 4 1
Madison: Self-Interest and the Problem of Factions .................. ..49

The Origin of Factions and the
Threat They Pose .................................................... 51

The Cure for Factions .............................................. 56

Diagramming Madison’s Model

Of Republican Government ........................................ 58
The Problem with Pluralism ....................................... 73
Conclusion .................................................................... 79

ix

Chapter 3

Chapter 4

Chapter 5'

Chapter 3: The Virtues of Liberal

Property Laws .........................................................
The Basis and Purpose of Property ...............................

Private Property and Liberal Stability .............................

Chapter 4: The Role of Political Leadership in Liberal Society ...............

The Rhetorical Strategy in Locke’s Doctrine of Property. . ..

Leadership and Democratic

Education .............................................................

The Fractured Public Sphere and the

Suburbanization of the Soul ................................ ' ........

Conclusion ............................................................

Chapter 5: A Floor Without a Ceiling: Redevelopment and the

Social Production Model .......
The Challenge of Economic Redevelopment ....................
Economics or Politics? ....................................

It’s the Regime, Stupid ....................................
Efficiency vs. Equality: The Necessary Tradeofi'?. . . . ..
Applying the Social Production Model ..................

The Changing Michigan Landscape ...............................
The Michigan Urban Homestead Act ....................

From Social Control to Social Production ..............

Conclusion ............................................................

Chapter 6: Anatomy of a Crisis:
The Consequences of Urban America’s Departure

From Liberalism ........................................................

......... 8O

........ 81

........ 96

...... 101

..101

........ 108

....... 114

...... 121

..123

...... 126

...... 127

...... 130

.139

..... 142

..... 144

..... 145

...... 154

..... 159

..... 162

Bosses and Bureaucrats: A Reconsideration of
Urban Institutions .......................................................................... 163

Birds of a Feather: Welfare State and

Market Model Redevelopment Programs ..................................... 167
The Welfare State ............................................................ 168
The Market Model ............................................................ 173
Conclusion ................................................................................... 179
Bibliography ................................................................................ 1 82

LIST OF FIGURES

Figure 1: No Permanent Majority in a Simple System .........60

Figure 2: Indifference Curves for a Three Party Decision........................................64

Figure 3: Systematic Bias in a Three Party Decision ......................................... 66
Figure 4: Beginning of an Extended Sphere .................................................... 68
Figure 5: New Possibilities in an Extended Sphere ............................................ 69
Figure 6: Strong versus Weak Preferences ..................................................... 71
Figure 7: Impact of Minority Preferences on Outcomes ...................................... 76
Figure 8: The Fractured Public Sphere .......................................................... 110

xii

CHAPTER ONE
The Origin of Systematic Bias: Fractured Ideas About the Fractured City

A few summers ago I was helping to develop a housing program for the Hudson
Institute that was to be implemented in the State of Michigan. The project gave me an
opportunity to meet with many people across the state. One meeting brought me to the
office of Woodrow Stanley, the Mayor of Flint. We spoke at length about the problem of
abandoned property and the need for neighborhood redevelopment. Then I presented him
with a summary of the program we were considering. I touted it as a new tool for cities
to use to revitalize themselves. When I was finished, Mayor Stanley politely offered his
own analysis. He told me that more than any new tool or program, what cities like Flint
need most is to be made whole once again.

It was only later that I began to think more seriously about what Mayor Stanley
said. Reflecting on his words, I came to realize the ways places like Flint, Detroit,
Cleveland, and most big cities are fractured and in need of being made whole. My
thought was greatly aided by the recent proliferation of books written by or about big city
mayors. As I read accounts of other cities, I learned how pervasive the problem really is.
Former Philadelphia Mayor Ed Rendell, a Democrat, has made similar arguments
(Bisinger, 1997). Republican Mayor of Indianapolis, Stephen Goldsmith has as well,
which suggests that the matter is not simply partisan in nature (Goldsmith, 1997).

Finally, Daniel Kemmis, Mayor of Missoula, Montana, makes largely the same argument
in his book, The Good City and the Good Life, revealing that the problem is not confined

to old rust belt cities (Kemmis, 1995).

Before long I learned that the matter of wholeness is hardly a new issue. Nor is it
an issue recognized exclusively by politicians. Much of the early literature in the field of
urban planning made note of the same problem mentioned by Mayors Stanley, Rendell,
Goldsmith, and Kemmis. Lewis Mumford explained half a century ago that:

The city, if it is anything, is an expression and symbolization of man’s

wholeness—a representation in buildings of his nature and purposes. This

wholeness is not elementary; it emerges from the diversity of man’s interests,
activities, and purposes, from the division of labor and the differentiation of
associations and institutions, and from all those infinitely varied human capacities

which were perhaps latent but undeveloped in the primitive village. (1995, 162).
Mumford’s description suggests that the city is meant to be whole, not in the way a
sculpture is whole—carved out of a solid piece of material, but rather, the city is meant to
be whole in the way that a finished jigsaw puzzle is whole—assembled out of various
parts that fit together. Wholeness, therefore, requires diversity, but even more, it requires
that diverse elements exist among one another and interact with one another. The
problem, as an important critic of urban planning, Jane Jacobs, has argued, is that much
of urban planning has destroyed this vital diversity. There seems to be an innate human
desire to sort out differences and collect like with like. However, when this is done in a
city, zoning specific areas for particular uses and densities, the effect is segregation.l
That is, there comes to be a specific area of the city that is residential, another specific
area that is commercial, and another that is industrial. Within these specific areas, zoning

often further divides, for example by restricting certain residential areas for single family

housing and other areas for multi—family housing, which can have the practical effect of

 

‘ Sam Bass Warner, Jr. (1995) offers an excellent discussion of the history of zoning
regulations and their tendency to use the language of health, safety, and order as a thin
veil for racial and economic discrimination. See especially pages 28-37.

economic segregation assuming a higher property value, and therefore degree of wealth,
in the single family areas.

Often overlooked is the idea that satisfying the desire for orderliness may invite
problems of a different kind. The imposed orderliness of the professional planner
undermines the diversity and spontaneity of the city. Different activities occur at
different times in the city. For example, commercial and industrial activity would be
concentrated in the daytime hours. Residential areas are livelier in the evenings when
workers return home. Nightlife is confined to areas zoned for entertainment and
recreation. By segregating certain time critical activities to specific areas within the city,
there will be rolling dead periods for each area as its use has its down time. This
encourages crime and other anti-social behavior, as one might witness when straying too
far from the theater district in search of a parking spot: such a situation takes one away
from the designated “live” portion of the city and into a “dead” portion.2 Even worse,
segregating activities to different areas of the city is like sorting all of the pieces of a
puzzle according to color: if planning stops there, the puzzle will never fit together. In
terms of the city, this means that the diverse interaction, described by Mumford as part
and parcel of the city’s wholeness, is lost. People are able to restrict their activity to
specific areas within the city, avoiding other areas that may be in decline. This means
that people no longer confront the conditions of their fellow citizens, no longer exchange
ideas with their fellow citizens, and in some sense, no longer consider their own well
being connected to that of their fellow citizens. Another critic of planning summed up

the problem well, concluding that “the big city is sliced into pieces, each of which is

 

2 The idea of inadvertently wandering into a city’s dead space is the premise of Tom
Wolfe’s novel, Bonfire of the Vanities (1987).

observed, purged and equalized. The mystery of the strange and the critical rationality of
men are both removed from the city" (Jacobs, 1961, 23 8).3

At an even deeper level, another problem reveals itself. Planners do not seem to
be aware of the tension between the planned city and the natural, diverse city. As a
result, citizens may have a will different from the will of the planners. Consequently,
citizens may resist the imposed order of the planner, undermining the intended policy
goals. Yet, planners, blinded to the divide between their vision of the city and the
citizens’ vision of the city, may continue to analyze and create policy that appears sound
from the perspective of an office in city hall, but functions poorly in the real world.4 As
Jacobs writes, “there are several dozen use categories, each differentiated most carefully
and thoughtfiilly—and all of them are irrelevant to the real life problems of use in diverse
city districts” (1961, 235). As a result, the best efforts of planners and policy experts
may, at best, not lead to the expected results. At worst, they may have unintended results
that actually make problems worse.

In addition to thinking and reading about cities, I continued to visit cities and pay
closer attention to the fractures within them. Some of the ways that urban areas are
fractured are fairly obvious. Central cities are divided from suburbs as a metropolitan
region crumbles into numerous municipalities. Cutting across metropolitan regions,
dividing them in other ways, are various special purpose governments, including school
districts, transit authorities, and districts for utility service, resource management, or

recreation. Cities are further divided internally by special districts and zones related to

 

3 Jane Jacobs quoting Paul J. Tillich.

4 Note that this phenomenon puts society well on the way to a condition warned against
by many political philosophers, most particularly, John Locke, whereby the government
develops a will distinct from that of the people.

policy programs. To list just a few, there are certain neighborhoods designated as historic
districts, certain industrial areas marked as redevelopment zones, and certain commercial
areas cordoned off as principal shopping districts. Each area receives distinct treatment
in terms of policy, setting it apart from the city as a whole. Each district also has its own
governing board, often rival to one another and even to the general purpose government.5
The result is that urban areas can literally have hundreds of divisions, subdivisions, and
counter divisions. By one count, “Metropolitan New York City, for example, contains
more than fifteen hundred separate governments. Metropolitan Chicago has over twelve
hundred governments, Pittsburgh has over seven hundred, and Philadelphia over nine
hundred” (Herson and Bolland, 1998, 241). In the wake of such fracture there is no
single entity left with the legal power to coordinate the multitude of parts. As Ed
Banfield argued, “The ‘problem of metropolitan organization’ exists in this country in a
form that may be unique. Actually, it is really two quite different problems. One comes
from the multiplicity of more or less overlapping jurisdictions within a single

metropolitan area, and the other from the absence, in any such area, of a general-purpose

government having jurisdiction over the whole of the area” (Banfield, 1991, 275).6

 

5 For example, the board overseeing the historic preservation district may see itself as
rival to a tax increment financing authority or a brownfield redevelopment board because
all three are competing for scarce resources via indirect tax subsidies. This topic will be
covered in greater detail in Chapter Six.
6 Some people have seized on this point to argue in favor of an expedient solution. They
recommend the creation of a new level of general purpose government encompassing the
entire metropolitan region and legally superior to all general and special purpose
governments in the region (Orfield, 1998; Rusk, 1995). However, as will be argued in
Chapter Five, this approach fails to address the source of the problem and would be, at
best, only a partial solution. This point, too, was noted by Jane Jacobs writing that:
There is widespread belief among many city experts today that city problems
already beyond the comprehension and control of planners and other
administrators can be solved better if only the territories involved and problems
entailed are made larger still and can therefore be attacked more ‘broadly.’ This

Given the multiplicity of special purpose governments mentioned above, one
might hope that at least the city government itself would speak with a single voice. This,
however, is not the case. The greater complexity of public life has effected the design of
urban institutions. Specifically, it has accelerated the rise of single purpose institutions,
which deal with narrow slices of larger problems (Long, 1966).7 lnstitutionally a city is
divided into numerous departments and agencies, each specializing in a particular service
such as transportation, health, housing, or sanitation. Each of these departments is often
divided both horizontally—assigned different precincts of the city—and also vertically—
responsible for particular aspects of the more general department. This organization
scheme has a certain internal logic. As cities take on more complicated challenges,
rationality and the desire for order demand that planners isolate distinct facets of city life
and focus particular agencies on each facet. As articulated famously by Max Weber
(1947, 329-41), this allows for practitioners to develop and apply expertise to each
particular problem, be it transportation or public health, housing or economic
development. It also allows for routine to develop, which can make service delivery
more efficient. 8 However, this internal logic proves to be incomplete. Real problems
can seldom be isolated because lives are not lived in a segmented manner. A city

plagued by crime, for instance, may also face the related problem of poverty. Poverty

 

is escapism from intellectual helplessness. ‘A Region,’ somebody has wryly said,

‘is an area safely larger than the last one to whose problems we found no

solution.’” (196], 410).
7 This is similar to the argument made in the implementation literature, particularly by
Pressman and Wildavsky (1984) who note that the complexity resulting from numerous
and overlapping agency jurisdictions hampers the ability of policy, once crafted, to effect
positive change See also Bardach (1977). The present study will not focus on the
problem of fragmentation as it relates to implementation, but rather as it relates to policy
formation. Far less attention has been paid to this topic, but see Yates (1977).

6

may stem from lack of economic development but also from inadequate transportation
and child care. These may in turn contribute to problems in housing, health, education,
and the environment. Simply put, the challenges of urban life—of political life more
generally—are inter-related; they form a syndrome wherein one symptom triggers
another, which triggers others in turn. Therefore, to understand any one component, or
even to understand each component separately is not the same as understanding real
problems as they effect real lives. Jane Jacobs summed up the problem well in arguing
that “Each of the many internal divisions of responsibility, vertical or horizontal, is
rational in its own terms, which is to say rational in a vacuum. Put them all together in
terms of a big city itself and the sum is chaos” (1961, 411). Consequently, one agency
may interfere with the work of another. This could be for deliberate (and sinister)
reasons such as a competition for prestige, funding, or staff. However, it may be for a
more innocent reason: If it is true that the problems plaguing a city are complicated, it is
possible for two different experts to see the same problem as falling within the purview
of different agencies. In such a case, each agency may develop a program, seeking to
remedy the problem. However, lacking central coordination, the rival courses of action
may undercut one another and offset the intended results.9

The consequences of urban fragmentation have been devastating. Metro areas
and central cities are divided economically, racially, and socially. Demographically,
many of the older core cities have experienced major changes in their populations. Most

began losing white population in the 50s and saw an acceleration of flight in the 60s and

 

8 For a helpful discussion of Weber’s influence on bureaucratic organization see Talcott
Parsons’s introduction in Weber, 1947, 13-15.

9 For example, housing and transportation policies seem to have undermined the success
of renewal and anti-poverty programs in the 19505 and 19605.

705. By the 805, emigration was no longer restricted by race; the black population had
begun to leave as well (Jackson, 198 5). As a result, cities have more that ever become the
home to a concentrated population of poor minorities (Harvey, 1973). Economically,
cities have had to redefine themselves; they are no longer exclusively industrial powers,
but are now centers of information and technology as well. With this transformation, old
central cities have ended up competing less and less with each other for population and
tax base, but they are forced instead to compete with their surrounding suburbs (Garreau,
1991; Rusk, 1995; Sugrue, 1996). The consequence of fragmentation coupled with
segregation is that the areas that face the greatest challenges are also least equipped to
deal with them. Those with the greatest capacity to engage in public problem solving
sense the least need to do so. Their residents come to believe that they can isolate
themselves from urban problems. Furthermore, they come to believe that the blame for
those problems lies solely on others—on the people living in the city. Fragmentation has
allowed segregation of race and of wealth, but more damaging, a segregation of civic
responsibility, creativity, and ideas. As a result, the public sphere, from the level of
identifying and articulating problems to the agenda setting and aggregation phase of
policy making tends to be anemic—missing the very ideas that may be necessary to fulfill
the larger principles of the liberal regime and the expectations of its citizens. This is the
problem of systematic bias.
The Methodological Revolution and the Fracturing of Ideas

During the same period that I was visiting cities, I began to think about the

scholarship on urban politics (and political science more generally), realizing that not

only is our subject matter fragmented, but so is our understanding of the subject matter.

First, theories have been divided from methods, which has brought about further division
within both theory and method. The result is conflicting theories and competing
methods. Such a condition may be desirable from the perspective of science, as
competing models are assumed to push research toward a greater understanding of the
truth, but there is danger that methodological debates may distract researchers from the
real world problems that initially attracted their attention.

Political research has not always been plagued by division. Scholars such as
Lewis Mumford and Jane Jacobs wrote important books documenting the relationship
between city planning, public policy, and the behavior of citizens both socially and
economically. Others such as Ed Banfield took up less generalized, but still important
studies. The common link among these scholars is that their research was never wholly
theoretical, nor wholly empirical. The result of blending theory and empiricism by no
means ensured agreement, but it did make possible a rich debate. At the same time, it
gave birth to research that was critical without lapsing into cynicism. Thus, scholarship
was realistic in its discussion of slums, corruption and the cleavages of class and race, yet
it was optimistic enough not to destroy the image of cities as exciting centers of
opportunity and potential integration.

This would not remain the norm. Changes with respect to approach and method,
coupled with the greater specialization of the social sciences, would give way to a
noticeable shift in the tone and conclusions of research. In the case of political science,
the study of local government disintegrated into debates over power and institutional
organization. Budgeting was largely relegated to the new field of public administration,

and policy analysis came to resemble a cross between economic forecasting and cost

accounting. As is often the case when broad topics are reduced to single points, there
came to be two general sides to each issue: In the case of power, there were disputes as to
whether elitist or pluralist models best explained who controlled the city. With regard to
institutions, the debate focused on machine versus reform cities. The budgeting debate
found itself trapped inside the larger issue of federalism and the question of centralism
versus localism.

The same period saw the development of new analytical tools. More
sophisticated mathematical models on one hand and the growth of rational choice theory
on the other brought new grounds for disagreement. What is more, they created new
terms for debate well removed from the city itself: Controversies centered less on
whether a given policy alternative was good for the city or whether a program would help
those in need, and more on which data set should be used, how to operationalize a
particular variable, and how best to specify a model. However, such highly specialized
debates are meaningless to citizens, elected officials, and policy practitioners, meaning
the research loses real world application.lo This sentiment is reflected in a remark
belonging to Ed Banfield, worth quoting at length:

To be sure, many of those who have been trained in the techniques of policy

science can adapt to a policymaking setting by subordinating ‘science’ to

common sense. A policy scientist who lacks this flexibility, however, is likely to
find that he can communicate only with other policy scientists. The political
executive, whether elected or appointed, and the lawmaker and his staff, although
intelligent and well informed, do not know now, and are not likely in the future to
know enough statistics to interpret the analyst’s reports; indeed, the method and

mode of thought of the analyst are likely to strike the practical man as perverse,
even ridiculous. (1980, 14). .

 

‘0 For a critical review of the literature spawned by the methodological revolution and its
increasing irrelevance to the real world, see Green and Shapiro, 1994.

10

It is important to point out that the criticism is not of the methods per se, but rather of the
way they have come to be used. There is a tacit assumption that sophisticated models can
substitute for theoretical rigor. Furthermore, there is a tacit assumption that these models
allow for a liberation of research from normative considerations. This is not correct.
Models can not relieve us of theory, and is their methodological sophistication, there is
actually greater need to ground research in normative assumptions—assumptions that
should be made clear in the beginning of any research. Otherwise there is nothing to
guide the methods. Method, as a tool, and like any tool, is neutral. in

Even as disputes enveloped political research, and questions arouse as to the
validity of such work, scholars attempted to apply the new methods to the study of cities.
However, when researchers attempted to compute the level of democracy in a city or the
degree of equality in a program, they typically arrived at stark conclusions: cities almost
always failed to measure up to expectations. The effect was an even greater degree of
criticality—and a loss of the earlier spirit of optimism. This colored the image of urban
politics such that by the late 60s, political scientists could seldom mention the city
without also speaking of crisis. It is little wonder that by the 70s and 80s the discipline of
political science was still of the rise, but attention had shifted to national politics and
beyond. The study of the city, like the city itself, was in decline.

Others have commented on this matter. Paul Peterson has attributed the decline
of post 608 scholarship to the fragmentation of the discipline. He compared the rise of

numerous sub-specialties to “a multiplicity of feudal barons each encapsulated in remote

 

11 Note that I offer in Chapter Two a spatial model of Madison’s argument in Fed 10.
This is to serve as an example of the appropriate use of models connected to normative
principles.

ll

and insignificant provinces till[ing] fields of little concern to the larger world” (Peterson,
1981, x). Ira Katznelson suggests that “the ways we usually talk about urban politics
make it impossible to know what has happened and why.” This, he claims, is because
“the language of analysis is clinical, not political; diagnostic, not historical. Far too much
remains hidden from view." (Katznelson, 1981, 5). In an even more candid statement,
Stephen Elkin admits that he is “embarrassed by the paucity of guidance for political
affairs that political science presently offers.” He argues that political science should be
of value to the “intelligent citizen who might be gratified to gain a deeper understanding
of what is required to create and maintain a political way of life that he considers worthy”
(Elkin, 1987, ix). Putting these three statements together, we arrive at a troublesome
conclusion: Political science fails to offer the real world practical advice because we do
not understand or even attempt to operate in the real world. The image is reminiscent of
Socrates’ story about Thales who fell into a well because “in his eagerness to know the
things in heaven ...[he] was unaware of the things in front of him and at his feet” (Plato,
Theaetetus, 174).

Progressivism, Pragmatism and the Logic of Crisis.

Perhaps the political and the intellectual fragmentation are related. One may not
have caused the other, but it may be that a common source drives both. They may result
from a different way of thinking about intellectual life and political life owing to an idea
that began late the 19th century. This was the era that introduced the Progressive

Movement, which focused on the separation of politics from administration and

secondarily, but importantly, on the creation of a professional class of administrators,

12

highly skilled in the emerging field of scientific management. ‘2 Basically, Progressivism
sought to rid the city of ideology. The politics of old, associated with the corruption and
waste of the machine, was to blame for the city’s social ills. Thus, the driving force of
Progressivism was that rational principles could be used to bring efficiency to the city. A
city run with business-like efficiency would rid itself of poverty, crime, and ignorance.

In effect, this turned out to be not merely the separation of politics from administration,
but actually the triumph of the latter over the former. Soon the intellectual world
witnessed its counterpart to the Progressive Movement with the birth of Pragmatism and
its emphasis on specialization, reductionism, efficiency, expediency, and progress. There
was no reason to judge a course of action based on its relation to founding principles such
as natural right. Such matters were assumed to be settled, outdated, or both, and
therefore irrelevant. Ideological debates only stood in the way of progress.

Thinking about the relationship between ideas and politics, and taking issue with
Pragmatism and Progressivism gave birth to the two main assumptions that drive the
present study: The first assumption is that ideas have consequences. Big ideas-—
comprehensive theories about human nature and its relationship to political society—-
have a way of dissipating into the culture at large. This is also a point made by Banfield,
explaining that:

Philosophical ideas somehow make their way directly and via the intuitions of
great literary and other artists to lesser lights—professors, journalists, and

 

12 The person associated most with pragmatism is John Dewey. See his Liberalism and
Social Action (1935) and The Public and Its Problems (1946). Useful commentary can
be found in Horwitz, 1987 and also Nichols, 1990. John Patrick Diggins (1984)
demonstrates with lucidity the tension between Pragmatism and liberalism. A very useful
history of the Progressive Movement can be found in Feingold, 1995, and a treatment
focused more narrowly on the movement’s political principles is in Schiesl, 1977. For a
discussion more directly relating the Progressive Movement to developments in political
science, see Banfield, 1980.

13

others—whose writings convey them to politicians, lawyers, businessmen, and

other managers of affairs, until finally the ideas (by this time much diluted and

otherwise altered) become widely, even generally accepted as the views and

standards—when verbalized, the cant—of the middle class. (1973, 12).

These ideas also help to define rights and responsibilities, which is to say what citizens
expect from the regime and what they are willing to give to give it, and each other, in
return.

The second assumption is that politics matters. Politics matters in two senses: In
the narrow sense, the decisions made in the political process effect the conditions of
society. The decision to use restrictive zoning changed the geography of the city
immensely. Likewise, decisions regarding tax policy, land use, and social policy impact
the city’s physical features as well as the citizens’ political, economic, and social
behavior. These are inherently political decisions as they, by definition, show preference
to one alternative way of life over another (Kelman, 1987).

Yet politics matters in a broader sense. The way we talk about issues and the
people involved in the process (and not involved in the process) may effect the actual
decisions that are made. That is, politics is not merely about outcomes, but also about the
process that leads to outcomes. Even the most sensible or well intentioned outcomes
may, therefore, be undermined if they are not reached via the appropriate procedure.
This reveals a connection between ideas and politics. Ideas establish a normative
foundation for the regime. Politics, to be effective, must operate within that foundation.
As tension develops between a regime’s political process and its normative foundation,
there will be resistance to its policy decisions.

This leads to the heart of the problem: we have departed from the original

normative foundation of the regime. The original normative basis of the regime, based

l4

on a certain set of ideas and creating the. foundation for a certain kind of politics, was
liberalism: the idea that human beings possess natural right, are primarily motivated by
rational self-interest, that government derives its legitimate power from the consent of the
governed, and that its primary purpose is the protection of property and should otherwise
be limited so as to maximize individual freedom to pursue happiness as one understands
it. These ideas have been challenged, and sometimes abandoned, by the new pragmatists.
Consequently, there has emerged a shift, or a fundamental tension between the original
normative foundation of the regime and the present. This tension, I submit, is largely to
account for the problems that challenge our regime in general and urban America in
particular. The city’s wholeness has been fragmented because of our abandonment of the
normative lessons of the founders.

What has happened is this: Liberalism, from its inception, faced one great
challenge—the need to manage self-interested people without sacrificing freedom and
equality. By this very nature this means that the liberal regime can never be perfectly
whole. It also means that the natural tendency of the liberal regime may be toward
fragmentation. With fragmentation, the key problem is that some will be better equipped
to deal with it than others. The strong, the wise, and the wealthy may be able to live an
adequate existence in a fragmented world. But others cannot. They will be cut off from
the benefits that were promised at the beginning of the regime and they will be ill
equipped to participate in the regime. Thus, fragmentation leads to the existence of two
classes of citizens: the privileged whose interests dominate public life and the underclass
whose interests are effectively shut out of public life. The result: after being shut off for

a long period of time, they will, as the founders of liberalism warned, reject the

15

legitimacy of the regime and rebel. In sum, these conditions are bad for all, but they are
worse for the most vulnerable.

Political science lies at the crossroads between ideas and politics. If this is true, it
seems to alter slightly, but importantly, the way we ought to understand the discipline.
Typically we think of political science as offering models that describe the world as we
find it. The models are neutral with respect to the world, as are models in the natural
sciences. In the best case, the model allows us to explain and even predict future
outcomes with some degree of accuracy. However, if ideas have consequences, it could
be that the way we study politics actually effects our subject matter. That is, perhaps a
model claiming merely to describe behavior in policymaking actually teaches actors to
exhibit that behavior. What was at first a model is now a strategy. In short, thinking it
may make it so. This would mean that models can not—and should not—be value free as
political scientists normally claim them to be. A model will always contain some
normative component. This means it is important to identify the normative component of
any model and note the degree to which it is either in harmony or tension with the
fimdamental principles of a regime. This may reveal a serious problem: To the extent
that a model is in normative tension with these principles, it will encourage behavior that
is potentially dangerous to regime stability. Since politics matters, the policy made
through a process rooted in such tension—for example the zoning policies described
above—will likely face resistance.

Finally, if politics is not merely about outcomes, then the study of politics can not
merely focus on “who gets what, when, and how.” Since politics also involves

procedure, political science must examine the impact different procedures has on those

16

outcomes—it becomes a study in the art of the possible. This implies that political
science can never be simply descriptive. It must also be prescriptive. But this means that
the methods used for mere description of a city will not be appropriate for research that
seeks to move beyond. Pragmatism and the developments described as the
methodological revolution brought about the rift between normative and empirical
research. The problem, as Ed Banfield has stated well, is that “it is one thing to predict
how people will behave; it is another to say how they would have to behave in order to
get from life what they really want; and it is still something else to say how they ought to
behave. A model of analysis well suited for positive studies may be inadequate for
conditionally normative ones and pernicious for normative ones” (1991 , 379). This gives
us reason to reevaluate the dominant model of urban politics: pluralism.

Pluralism is important not simply because it is well known and widely accepted in
academic circles. Rather, the importance lies in that it is the dominant model to have
emerged at the critical time when Pragmatism and Progressivism had taken root in the
regime. As has been argued, the ascendance of pragmatic philosophy and reform politics
brought a preference for expedient outcomes without regard for ideological content. This
was the moment, then, of the break between normative and empirical research, bringing
soon thereafter the break between descriptive and prescriptive research. The new model
offered by pluralism, focusing on the relationship between the aggregate strength of
coalitions and policy decisions served the new politics well. In its parsimony and value
neutrality, it also fit with the intention of Pragmatism. As a model it described the new
political landscape—at least in certain cities: There continued to be competition among

interest groups, but there was no longer a political machine capable of mitigating this

17

competition, and so government assumed the role of referee with an emphasis on
efficiency and outcomes over problem solving. The substance of politics becomes
identifying the winners and losers, and so the important question, exemplified by the title
of the first important work in pluralism, was Who Governs? Lost was any regard for the
question of how they govern (Dahl, 1961).

It is our departure from the original basis of liberalism—our move in favor of
political expedience toward Progressivism and Pragmatism—that has rendered us unable
to meet liberalism’s greatest challenge of inclusion. Citizens are divided against each
other and now organize not for the collective good, but for the sake of narrow, short-term
benefits that come at the expense of others. Liberalism was not meant to have absolute
winners and losers, but that is increasingly what we see when we look at our society. If
this is true, then we must pay close attention to the warnings of the founders of
liberalism, for it may be that they were aware of the danger and left us a lesson in how to
deal with the danger. Furthermore, we need a new political science that is capable of
understanding behavior.

The Emergence of Regime Theory.

Fortunately, we need not begin wholly anew in this endeavor. Others have
written of this problem, particularly as it appears in the urban crisis literature, and some
have gone on to offer advice for working beyond the crisis. Peterson argues that we must
rise above the simple dichotomies that seduce us away from general theory. There is
more to understanding local government than debating whether power is exercised
according to pluralist or elitist models, and more to discussing institutions than arguing

over machine vs. reform cities. These debates lead us down a path that too often

18

degrades into methodological disputes over units of analysis and data sets. Before long
we suffer from the very problem Elkin bemoaned: we have spirited academic debate that
is otherwise meaningless to the real world. Katznelson adds that if we are to produce
work that will contribute toward a general theory of local government as opposed to
specialty studies of budgeting, service delivery, or power, we must recover a sense of
history. Elkin agrees that we need to move away from what he calls the “organ theory”
and back toward discovering the body that connects the parts. More importantly,
drawing from Tocqueville and Mill, he argues that “the study of local politics should be
normative” (1987, 1).

By normative, Elkin does not mean that scholarship should focus solely on a
discussion of what the city ought to be. He does not simply contrast normative from
empirical research as if the two were independent of each other. Instead, he draws close
connection between them. Building on his original argument that political science should
be prescriptive as much as it is descriptive, he adds that scholarship “must rest on a more
complex conception of the larger political whole.” Furthermore, it must be “self
conscious” meaning that researchers need to be aware of “the kinds of arguments that
underlie their advice” (Elkin, 1987, 4). The study of policy, for example, must be more
than a series of econometric models; it can not be isolated from questions of how that
policy relates to the foundational assumptions of the political regime. Put another way,
self conscious research not only asks the question “What is it?” but it also asks the

question “Is it good?” or “Does it fit within the nature of the regime?”13 Every regime is

 

l9

founded on a particular understanding of human nature. This determines the purpose of
the regime and in turn gives form to its institutions. Institutions, Elkin notes, instruct
citizens of their rights and duties—they shape what we expect from the regime and each
other. Yet, institutions also establish the parameters for policy debate and place limits on
certain outcomes. Ironically, the solutions most conducive to a good society—one that
realizes its founding principles—may at times lie outside the horizons established by its
own institutions. It is in the interest of understanding, and also expanding these horizons
that regime theory emerged. This necessitates explaining and correcting the damage
wrought by Pragmatism, Progressivism, and pluralism.

One of the first explanations of the inadequacy of pluralism appears in Paul
Peterson’s City Limits. There, he argues that rather than simply aggregating the demands
of competing groups, we must understand policy outcomes as a fimction of the economic
character of a particular program. In doing so we realize that “the social and economic
context within which the city is embedded limits choice” (1984, xii). Cities seek to
maximize their interests, which can be generally equated to the interests of their export
industries. They also need to preserve their residential base (23). The limits on policy
choices arise because cities have no legal authority to prevent residents or industries from
leaving and taking their capital with them. Companies will leave a city if its policies
interfere with profits and residents will leave if the costs of taxes too far exceed the

benefits of services. Thus, cities are forced to compete with one another by offering the

 

‘3 In a sense, Elkin is recommending that we follow the model provided by Plato’s
Republic. The dialogue begins with a series of definitions of the subject matter, justice.
However, the interlocutors (particularly Glaucon) are not satisfied with mere description
or definition of justice, but rather, they ask Socrates to convince them that it is also good.
This requires that they move beyond the empirical definition of justice to a normative or
philosophical analysis of its nature.

20

most efficient settings with regard to land use, labor force, and capital (24). According to
Peterson, the average resident already receives less than one dollar in services for every
dollar paid in taxes (38). As cities engage in redistributive policy, that ratio becomes
even less favorable and the odds of emigration increase (44). Leaders realize this, and

the result is a chilling effect on policies that emphasize egalitarian concerns (69). In
short, there is a strong bias in favor of policy that enhances the local economy, which
Peterson calls developmental policy. As Peterson concludes, “the emphasis local
governments place on efficiency at the expense of equality is due not to any
antiegalitarian commitments of local policymakers, but to the constraints under which
local governments operate” (71).

At the same time that Peterson was explaining the economic limitations of
pluralism, Ira Katznelson took up the institutional limitations in his City Trenches. His
case study of northern Manhattan looked at political organization and noted that certain
groups were faring much better than others. He explained this fact by demonstrating how
the separation of work and community established a set of informal institutions or
“trenches” that preclude certain kinds of political movements (1984, 18-19). Katznelson
argues that the spatial distinction between work and home is key. As capitalism created
this separation, it became possible for the first time for the wealthy to live apart from the
poor. Thus, the spatial distinction compounded the preexisting class distinction (75).
However, the working class only paid attention to the economic distinction when it was
at work; at home, since all who lived in a given area were of the same class, the most
noticeable distinction was ethnicity. The first lines of difference were between the area’s

Jewish and Irish residents. The wealthy, who controlled the city’s formal institutions,

21

took advantage of the situation by creating a set of informal, community-based
institutions that would accommodate the ethnic cleavage by providing a few basic
services and petty offices of patronage. In doing this, they exasperated the ethnic
cleavage and ruled out the possibility of class unity. Katznelson compared this to a
system of trenches channeling one rival against another, and diverting both from their
true opponent. As many white ethnics left the city for the suburbs, a second wave of
immigrants, primarily African Americans and Hispanics, moved in. However, the
minority of remaining white ethnics retained possession of the trenches. The city’s
response was to create yet another set of trenches exclusively for the new residents.
These took on a character somewhat different fiom the original trenches, for they did not
seek to remedy problems but merely “aimed at keeping angry people busy to prevent
disorders” (141). The result is that the city remains less responsive to the working class.
In Katznelson’s own words, they are but “substitutes for structural economic changes
and for a basic redistribution of wealth and power among classes and races” (188).

At first blush these two theories might appear to be at odds with one another. In
Katznelson, the source of policy failure is the institutional arrangement of the city. In
Peterson, the problem is the nature of the policy within the larger economic context.
Katznelson implies that reform of our political institutions would create opportunities for
progressive policy outcomes. Peterson’s analysis of political economy would seem to
suggest that outcomes are limited under any institutional arrangement as long as capital
remains mobile. Regime theory, beginning with the work of Stephen Elkin and Clarence
Stone, connected the two critical points by expanding the discussion to a larger

theoretical context: Rather than focus on institutions or the political economy in isolation,

22

they pushed the analysis to a higher level of generalization and inquired into how both
interact in the regime as a whole. Elkin and Stone developed a model sensitive to the
nature of policy as well as the importance of institutions and the actors involved in the
process—both government and citizen/business. This leads to regime theory, a more
holistic understanding of the world, connected to the liberal normative foundation, and
therefore the perfect antidote to Pragmatism, Progressivism, and pluralism

Systematic Bias.

One of the key features of regime theory is the problem of systematic bias. The
problem stems from the tension between equality and efiiciency. Elkin draws on
Peterson’s analysis of the problem: because policymakers tend to view these two qualities
as being at odds with one another—what Arthur Okun called “the big tradeoff’—
efficiency will generally win out (for reasons Peterson detailed in City Limits). This
means that, as Katznelson portrays in City Trenches, marginalized classes who are in
need of greater emphasis on equality will be effectively shut out from city politics. Thus,
Peterson and Katznelson are both accurate in their respective analyses: As long as the
political economy remains limited by a particular understanding of efficiency, the
institutions of the city will be unable to accommodate certain interests. There will
necessarily be groups who benefit at the expense of others. As Elkin puts it, “there are
only certain kinds of politics that can flourish given the particular form that the division
of labor between state and market has taken in cities” (36). These particular forms will
“consistently favor some interests and impede others” (85). This is what Elkin terms
“systematic bias”. The idea of systematic bias reveals the theme common to Peterson,

Katznelson, and Elkin: the horizons in which American local governments operate are

23

much too narrow, in policy terms, institutional terms and ideological terms. This has the
effect of shutting creativity out of the public sphere and diminishing our ability to solve
problems. 14

This brings us to Elkin’s prescriptive teaching. We must first come to understand
equality and efficiency such that they are brought into harmony. To Elkin efficiency is a
system that promotes social intelligence—the ability to deal with the problems that
citizens face collectively. Linked to this is equality: a system that is free of systematic
bias ( 1987, 4), for Elkin argues that “if the operation of popular control is systematically
biased, problem solving is also likely to be ineffective, simply because some desirable
alternatives will go unexplored” (95). Thus, each quality becomes a necessary
component of the other. Yet, the fact remains that we do not ordinarily think of equality
and efficiency in Elkin’s terms. The reason is made clear by Elkin himself: the formative
effects of our institutions have eclipsed such definitions from our minds. Elkin attributes
this to our departure from the founders’ intentions in calling America a commercial
republic. It is not that they planned for the Chamber of Commerce to run the city. Nor
did they intend the first order of politics to be the inducement of business activity (145).
These circumstances would too easily allow for large concentrations of wealth—
something the founders cautioned us against. Certainly, there was an intention that
business and capitalism would prosper. However, these were largely means to a higher

end: security and liberty.

 

'4 For this reason, Elkin uses the term social intelligence to describe a system that is free
from systematic bias and therefore able to solve problems. For an excellent application
and elaboration of the concept (using instead the term social production) see Stone, 1989,
8-9, 226-229.

24

There is a connection between Elkin’s account of systematic bias and James
Madison’s discussion of factions in Federalist #10. Madison warns that if a particular
faction secures control of the regime, its members may use their power to serve their self
interest at the expense of “the rights of other citizens or. . .the permanent and aggregate
interests of the community.” If one party continuously prevails over another, the
resulting insecurity will breed “increasing distrust of public engagements” and perhaps
ultimately rebellion. Madison councils that we not attempt to eliminate the cause of
faction, but rather we should seek to control its effects. This gives rise to the need to
extend the sphere of the regime so that there is a great variety of interests. There is more
than a geographic context to this advice: we must also extend the sphere with regard to
the kinds of interests presented in the regime. We must not only be a nation of farmers,
but also of mechanics, manufacturers, and merchants. In short, we are intended to be a
commercial republic. The resulting diversity will prevent any single interest, or faction,
from dominating the public sphere and abusing the rights of others. Madison explains
that “the most common and durable source of factions has been the various and unequal
distribution of property” and that managing this is the first order of government. In this
sense, systematic bias—our failure to control the effects of factions—is somehow related
to our failure to manage property. Elkin agrees, suggesting that we have departed from
the founders intentions regarding commercial republicanism.

If we consider the relationship from urban crisis to systematic bias to commercial
republicanism, we arrive at a most startling, if not radical, conclusion: moving beyond the
logic of crisis will require that we reevaluate our basic understanding of the regime. We

need to understand more clearly the purpose and role of private property and commerce

25

as well as the expectations citizens ought to have with regard to the regime and each
other. In short, we need to inquire into the very nature of the social contract. Elkin
writes in the preface to City and Regime that “the test of a good essay is whether it can
build on what is widely believed to be true—and present it in illuminating ways” (1987,
x). I would submit that not only did he pass that test, but he also established a second
test: A good essay should point beyond itself and stimulate further research. In using the
problem of systematic bias as a conduit to connect the urban crisis to our founding
principles, Elkin invites the next wave of research to reexamine those principles.
Overview of the Present Study.

Systematic bias emerged as a result of the fractured ideas about the fiactured city.
The effect has been a weakening of the urban regime’s ability to solve problems and
fiilfill the expectations of its citizens. Indeed, because ideas have consequences and
politics matters, there seems to be a cyclical relationship: Policy crafted in an atmosphere
of systematic bias (the result of corrupt ideas and polluted politics) invites resistance
from citizens, narrows their self interest, and creates even greater systematic bias for the
future. This chapter has attempted to demonstrate the emergence of systematic bias out
of an anemic understanding of politics—a politics that focuses on procedural expedience
and assumes that a uniform procedure will produce efficient outcomes. Systematic bias,
therefore, is the result of a certain kind of strategic behavior in the policy process—
unwittingly taught by political scientists to a generation of practitioners due to the
misguided belief that a model or a method can be neutral and merely describe the world

without changing it. Moving beyond this crisis, therefore, requires a different strategy—

26

one that seeks to promote social production. Regime theory, I contend, is uniquely
qualified to teach us this strategy. 15

The role of strategy in politics has of course been studied and pointed out, perhaps
most clearly by Machiavelli. The most provocative contemporary study on the matter is
William H. Riker’s Art of Political Manipulation (1986). The book is an excellent study
in real political behavior, assembling twelve cases from history, beginning with the
Roman republic and ending with twentieth century America. However, Riker commits
the error of weakening the connection between strategy and normative principles. No
better evidence to this point can be seen than Riker’s choice of the term manipulation for
the title. Riker casts himself as an impartial scientist merely describing a particular
behavior, but by terming the behavior manipulation, rather than strategy—the more
appropriate and neutral term, he casts an ominous shadow over the work. Furthermore,
he refuses to show where the “manipulative” behavior that he describes is, at times in
harmony with the normative principles of the regime and at other times, at odds with
them.

The point is clear if we consider two cases more closely. Riker brilliantly
demonstrates how Abraham Lincoln, in his debate with Stephen Douglas at Freeport,
asked a question of his opponent that, in effect, destroyed the old Democratic party
coalition. Lincoln’s strategic framing of the Freeport question triggered a party
realignment that gave the Republicans a working majority for much of the second half of

the 19th century. On the other hand, the ratification debate in the State of Virginia for the

 

‘5 Regime theory was not originally crafted as a deliberate strategy any more than
pluralism was, although the connection is more clear given Elkin’s emphasis on political
science being prescriptive

27

proposed Equal Rights Amendment in 1980 shows a different kind of strategic behavior.
In this case whip counts revealed that there was a tie in the 40 member Senate, which
would allow the Lieutenant Governor to cast the deciding vote. Knowing that the
Lieutenant Governor would vote in favor of ratification, Senator John Chichester, who
opposed ratification, refiised to cast his vote at all. This produced a final vote count of
20-19 in favor of ratification, but deprived the resolution of the absolute majority it
needed for passage (which it would have received had Chichester voted, produced a tie,
and allowed the Lieutenant Governor to break the tie).

Both are merely examples of “manipulation” as Riker describes them. But this is
irresponsible. Lincoln’s “manipulation” certainly was strategic—but his strategy was in
the service of natural right and liberal government (our normative foundations).
Chichester’s actions—described by Riker as just another case of manipulation—are far
less defensible from the normative perspective. Riker’s book is a fine teaching aid in its
use of examples, but why portray them as if they were morally equivalent? It would be
more valid to use the term “strategy” as opposed to “manipulation” and then point out
that in Lincoln’s case the strategy, being guided by our normative foundations, was
actually a case of liberal statesmanship whereas Chichester’s behavior, equal to Lincoln’s
on the empirical grounds of strategy, was indeed “manipulation” from the normative

- 6
perspective. '

 

‘6 The difference between political manipulation and liberal statesmanship will also bear
on the nature of political leadership as well as the role of the people in the policy process.
One thing this suggests is that not all ideas need by admitted to the policy debate. Some
are clearly destructive to natural right and the liberal regime. Stability would require the
omission of these ideas as well as those, which would otherwise do violence to the
process. So, some bias will exist in the agenda. However, systematic bias implies that
the views being left out are not of the sort described here, but rather the legitimate views
of distinct classes of citizens. Again, the key is that the decision to admit or restrict

28

There is also some reason for curiosity in Riker’s decision to use the term art, as
opposed to science or method. The text of the book betrays the idea of it being an art, for
it treats the subject in the sterile language of science—best exemplified by Riker’s
invention of the term heresthetic to describe the technique of political manipulation
(1986, ix). The text teaches the reader to consider heresthetics a mere tool, to be applied
scientifcally (i.e. without moral consideration) and studied scientifically (without
normative judgement). On the other hand, if we were discussing the truly neutral concept
of strategy, it would be more appropriate to describe it as an art in the sense of Plato’s
discussion of the arts in the Republic. The arts are neutral and therefore subject to the
moral vision of the practitioner. Knowledge of a certain art makes one person a good
guard and another, using the same art, a good thief. The difference between the two is
not detectable through method but rather through the moral vision that guides each
person’s behavior. Thus, just as Riker can not tell the difference between Lincoln and
Chichester, he would presumably not see the difference between the guard and the thief.
In the present context, he would not see the difference between pluralist politics that lead
to expedient outcomes but are destructive to liberal society and regime politics that lead
to socially productive urban policy.

Riker’s work stands as the perfect symbol of the damage caused by the
methodological revolution coupled with the ascendance of pragmatism. His error may lie
in a tainted understanding of human nature—one created and propagated by pragmatic
philosophers beginning with Dewey and Pierce. Riker focuses on the concept of self-

interest, which certainly is important to liberal politics. However, Riker’s pragmatic

 

views has to be based ion the normative principles of the regime, not political
expedience. This point may also bear on the important topic of discursive democracy.

29

understanding of self-interest leads him to see it as far too narrow and exclusive. In
short, his work is at odds with the liberal understanding of human nature and the regime.
For that reason, it is important to grasp exactly what those normative principles are, how
they relate to politics, and what this implies about strategy. This establishes the
organization of the rest of the present work.

Chapters Two through Four examine the principles of liberalism. The analysis
explains why fragmentation is a potential problem for liberal society. More importantly,
it demonstrates that the philosophers of liberalism, particularly John Locke and James
Madison, were aware of this problem. Chapter Two focuses on the idea of self-interest.
In its most extreme sense, self-interest can divide people against one another into a war of
all against all, the most extreme form of fragmentation. Equally dangerous, self-interest
can bring people together into groups, organized for the sake of gaining benefits at the
expense of others. However, just as self-interest can lead to conflict and war, it can also
lead to luxury, peace, and sometimes goodwill. The key for liberal regimes is to find a
way to use self-interest to bring about the latter conditions without sacrificing freedom.
Chapter Three examines the role private property plays in managing self-interest. Where
there are liberal property laws, self-interest will broaden and allow the benefits of one
person’s property to spill over and benefit others and the community more generally. It is
this political economy, I contend, that both Locke and Madison recommend as the best
way of expanding self-interest in a way that is conducive to liberal politics. Chapter Four
turns to the role of political leadership in the liberal regime. The discussion of property
reveals a certain dilemma: An unregulated economy will be unable to sustain liberal

politics. Likewise, an economy regulated with too heavy a hand will be resisted, giving

30

way to even more problems. I suggest that a careful reading of Locke and Madison
reveals that they were aware of this problem and use it to offer a lesson in the importance
of strong, yet subtle leadership.

Chapter Five is a case study of the housing project that first took me to Mayor
Stanley’s office. In it I examine the neighborhood redevelopment program alluded to at
the beginning of this chapter. Part of the program included taking on a property tax issue
that had been visited and revisited numerous times before by the legislature. Every time it
yielded the same results: discord among interests and death in the legislature. This was
not the case in the most recent attempt. I argue that success came because the issue was
understood more broadly—understood not in a vacuum but understood as it impacts
several other issues. The policy was intentionally drafted to bring in a greater variety of
interests, building a foundation for agreement where there had been discord in the past.
Equally important, the issue was framed so as to encourage broad over narrow interests.
The chapter is, therefore, a case study of applied regime theory. It demonstrates the
greater ability of regime politics to solve problems where pluralist politics can not.

Finally, Chapter Six examines redevelopment policy since the mid-201h century.

In it I attempt to show the influence of Progressivism and Pragmatism on the policy
formation. Programs such as urban renewal, model cities, and the more recent
experiment with enterprise zones fail to treat property with the care recommended by
liberal philosophers. As a result, these programs have a negative effect on the moral
calculus, and therefore the political and economic behavior, of citizens. This, I contend,

invites citizens to behave in a manner that undermines the intentions of policymakers.

31

In the end, it may not be that the city can be made perfectly whole. Indeed, we
may not desire a perfectly whole city. Fortunately, we do not require the city to be
perfectly whole. However, it is clear that we can not continue with the city as fragmented
as it is and by no means can we allow it to become even more fragmented. Thus, this
dissertation is meant to be a hopeful call for improvement, but not a utopian wish. It was
once said that the ideal liberal citizen is neither a dreamer nor a schemer. I contend that
the pragmatic era of systematic bias has moved us much more toward the latter. This
dissertation is intended to get us on the road toward the former, in hopes of striking some

middle ground.

32

CHAPTER TWO
Self-Interest: The Dilemma and the Promise

Before any strategy can be devised to restore urban politics to its liberal
foundation, we must first make clear what is meant by liberalism. We will undertake
such an explanation in this chapter and the next two. In this chapter we focus on the
central concept of the liberal understanding of human nature, rational self-interest. Much
work has been done on this topic. Social choice theorists offer complicated models of
self-interested decision making in the collective setting (Arrow 1951, Mansbridge, 1990).
Economists, too, explore the concept of self-interest, juxtaposing it to altruism (Sen,
1977). However, these works are inadequate for our purpose. They either treat the
normative expectations related to self-interest as settled matters (Sen, 1977), or they
divorce their studies from normative questions altogether (Arrow 1951). This not only
ignores the very reason the topic is interesting in the first place, but it also makes it
difficult to use these studies to advance a theory such as regime theory. For this reason,
we must focus on the study of self-interest that is more satisfactory, both
methodologically, and normatively. This is best accomplished by turning to the political
philosophers of liberalism, John Locke and James Madison.

In Locke’s First and Second Treatise we learn of the role self-interest (and the
desire for self-preservation more generally) plays in human behavior. Furthermore,
Locke explains the extent to which self-interest, united with the faculty of reason,
presents certain problems but also a certain potential for our well being. Rational self-
interest can divide people against one another, driving them to war or it can bring them

together, allowing them to live in peace. In this sense, the tendency toward

33

fragmentation that we saw in chapter one is a firnction of human nature—but only one
aspect of human nature. As we shall see, it is human nature in its least developed form
that drives people apart. To resign ourselves to fragmentation is to neglect the more
benign, but fragile, side of human nature—still a fimction of self-interest, but a more
refined understanding of interest.

James Madison also took seriously the relationship between self-interest and
liberalism. He focused less on the individual aspect of self-interest and turned instead to
the special problem self-interest poses in liberal society. Madison’s Federalist #10 warns
us that the creation of political society may address the initial problem of self-interest
driving people to an individual war of all against all, but this only gives rise to another
challenge. Self-interested people in a liberal regime will soon discover that they can
form into groups and use the power of the group to gain certain benefits at the expense of
others. If these groups are left unchecked, they will undermine the stability of the
regime.

Together, Locke and Madison reveal a dilemma attached to self-interest, and they
also reveal the solution to that dilemma. On the one hand, self-interest can keep people
apart and make them rivals on an individual level, rendering society impossible. On the
other hand, it can get them to organize into groups that exist merely to take advantage of
others, rendering any society unstable. At the same time, properly managed, self-interest
can unlock liberalism’s greatest asset: luxury. The key is to reduce the anti-social aspect
of self-interest in both its individual and collective sense. This requires an understanding

of self-interest and the role it lays in our moral and political calculus.

34

Our moral calculus was an important topic in urban literature prior to the
methodological revolution. Jane Jacobs, Lewis Mumford, and Edward Banfield
developed theories that looked to explain the condition of the American city not simply
as a function of institutions or economics, but rather as a fiinction of the character of the
people who lived in them and ran them. Banfield in particular developed theories that
saw institutions and economics as, at best, secondary issues—functions of the more
important character, or as he called it, ethos, of the people (Banfield and Wilson, 1963).
He considered self-interest to be a key to understanding ethos. This, he connected to
one’s sense of time: He asserted that as a person’s sense of time extended, he became
more future oriented, and his self-interest created a particular ethos; likewise, as a
person’s sense of time was constricted, he became more present oriented, and a different
ethos came to light (Banfield, 1990; 1991). What remained a mystery for Banfield was
what accounted for people’s different sense of time in the first place.

In a sense, the questions pursued by the “old” urbanists are the same ones that
confront the “new” urbanists. Banfield sought to explain essentially the same
phenomenon that regime theorists such as Clarence Stone seek to explain today. In this
regard it might make sense to attach regime theory to what we learned from Banfield—
the importance of understanding self-interest. Yet, this is problematic, in that it means
attaching it to the concept that Banfield himself claimed not to understand fully. Thus, if
we are to advance regime theory, we must also solve Banfield’s mystery—the mystery of

self-interest.

35

Locke: The Problem and Potential of Self-Interest.

Locke’s initial discussion of self-interest unites the concept of self-preservation
with reason, stating that God “spoke to [man] directed him by his senses and reason, as
he did the inferior animals by their sense and instinct, which he had placed in them to that
purpose, to have use of those things, which were serviceable for his subsistence, and
given him as means of his preservation” (1T§86.9-15).l7 The distinction between
humans and animals is telling. Humans are directed by their “senses and reason”
whereas animals are directed by their “sense and instinct.” If we are to interpret Locke’s
words literally, two substantive differences come to light. First, in animals self-
preservation is merely an instinct, whereas in human beings preservation is rooted in
reason. Instinct is less sophisticated, generally offering the discrete options of fight or
flight, with no middle ground, and so we should expect some degree of uniformity and
regularity in the way animals seek preservation. However, in human beings, reason
differs from instinct in that it assesses different circumstances differently. This is
connected to the second difference. Along with instinct, animals rely on “sense” but
along with reason, humans use their “senses”. Like instinct, sense is discrete in its
detection of danger. Thus, animals are simply either in danger or not in danger and
therefore must either act or not act for self-preservation. Humans, on the other hand,
having senses, are able to detect degrees of danger, and using reason they are able to
respond with a variety of actions. It is the union of the senses and reason that sets

humans apart from animals with regard to self-preservation.

 

'7 All citations to the First and Second Treatises are to the Laslett edition. I use the
standard convention of citing the abbreviated name, followed by the section number,
followed by the specific line numbers where appropriate. For ease of reading 1 have
modernized the spelling and capitalization of Locke’s text.

36

The Moral Dimensions of Self-Interest

How to interpret conditions and react to them is the basis of human judgement
and behavior. On the individual level this means attaching value to actions and
outcomes. This is what modern political scientists refer to as preference formation and
what more traditional theorists mean by morality or ethics. This moral calculus precedes
and determines our behavior. Yet, moral calculus involves more than individual decision
making. A critical element in the calculus—what we sense and how we reason—is other
people. As we deliberate, we must decide the degree to which others are a threat and the
degree to which they are a potential benefit. This shapes our actions relative to others. In
this regard, the complexity of our senses coupled with reason shapes not merely
individual moral calculus, but also relational political calculus—how we behave relative
to others or more simply, how we behave in terms of group making and as members (and
non-members) of groups. The greater complexity in a human’s moral calculus creates
greater variety among humans than among animals and also greater variety within a
single human being over time (as he faces different circumstances). It is the variety born
of this union that gives rise both to certain problems and a certain potential for human
beings.

There are three characteristics that we must consider if we are to understand self-
interest more fully. The first characteristic describes the scope of self-interest. In the
narrowest sense self-interest is concerned with bare preservation. This expands slightly
as a person desires to have use of those things, which were serviceable for his
subsistence, and given him as means of his preservation” (1T§86.9-15). In the broadest

sense, self-interest includes a concern for comfort. It is with the mention of comfort that

37

Locke first raises the issue of property, noting that “Adam’s property in the creatures was
founded upon the right he had to make use of those things, that were necessary or useful
to his being” (1T§86.26-28 italics added). Finally, comfort itself proves to be an
expansive term as Locke goes on to speak (1T§87), of the greatest comforts, and even
convenience (2T§33).

The second characteristic of self-interest describes its relational dimension. Bare
preservation is an exclusive concern, and the goods of sustenance are “for the benefit and
sole advantage of the proprietor” (1T§92). On the other hand, comfort and convenience
require us to take into consideration others, beginning with our offspring, but extending
to strangers. Locke stresses that even though humans, like all animals possess the
impulse of exclusive bare self-preservation, ‘8 adults will often sacrifice their own
preservation for that of their offspring (1T§56). ‘9 Furthermore, he notes that the goods of
comfort require innovation, which requires property rights. Property creates more
sophisticated links between the interest of one and that of others. In the First Treatise,
we learn that property allows us to benefit others by seeking our own self-interest. The
most obvious way is that we acquire wealth that we may share with others. This is most
clear in the discussion of inheritance. Locke explains that property rights passed from
Adam to his children and the rest of his descendents, noting that the purpose of property
is not merely for gaining things that are necessary or useful, but more broadly, for our

“comfortable preservation” (1T§87). He explains that parents have an interest in sharing

 

‘8 Note that Laslett calls attention to Strauss’s argument that Locke is echoing Hobbes.
Laslett indicts Strauss’s argument for reaching its conclusion based only on the “slight
vacillation” at 1T§56. However, this is to neglect the later references to self-preservation
and the context of the discussion in the Second Treatise (see Strauss, 1953, 227).

'9 As in his initial statement on the matter, Locke begins with something animals and
humans share in common and then goes on to show where they differ.

38

their property with their children for several reasons: We have an interest in propagating
the species (1T§56.20-27; §88.18-23), we have an interest in having others to take care of
us when we are old (1T§90.25-30), and we have a natural love and tenderness for the
young (1T§97.1-10). A key point is that what begins as a crude calculation of mutual
interest has the possibility of developing into genuine affection. The luxury of affection
comes only after one is reasonably secure in terms of personal, bare preservation and
sustenance.20 Ultimately, Locke tells us that the self-interested development and
acquisition of property allows one to benefit others beyond offspring. It also may benefit
mankind in general. Locke writes that:

Upon this ground a man’s having his stores filled in a time of scarcity, having

money in his pocket, being a vessel at sea, being able to swim, etc. may as well be

the foundation of rule and dominion, as being possessor of all the land in the
world, any of these being sufficient to enable me to save a man’s life who would
perish if such assistance were denied him; and any thing by this rule that may be
an occasion of working upon another’s necessity, to save his life, or any thing
dear to him, at the rate of his freedom, may be made a foundation of sovereignty

as well as property.”(I §43. 1 1-20)

There is another aspect of property that makes possible mutual benefit, and
perhaps even good will, which we see not by looking to the end of property—how it is
used—but to the beginning—how it is acquired and the interconnected nature of property
in a complex economy. Consider Locke’s discussion of a simple loaf of bread. In order
for more sophisticated goods to exist (the kind of goods that make possible comfortable
existence), people must develop a complex economy. This requires a sort of cooperation,

albeit one rooted in personal self-interest.

For it is not barely the ploughman's pains, the reaper's and thresher's toil, and the
baker's sweat, is to be counted into the bread we eat; the labour of those who

 

20 Of course once this affection develops, most parents, according to Locke, would
sacrifice even their own preservation for that of their children. The point here is that this
would likely not be the case if the higher idea of self-interest never developed.

39

broke the oxen, who digged and wrought the iron and stones, who felled and

framed the timber employed about the plough, mill, oven, or any other utensils,

which are a vast number, requisite to this corn, from its being seed to be sown to

its being made bread, must all be charged on the account of labour, and received

as an effect of that. (2T§43.13-21).
We learn that the acquisition and maintenance of property in any sophisticated form
requires cooperation. This also extends the relational aspect of self-interest beyond heirs
to non-related people such as friends, fellow citizens, and strangers. In sum, it may be an
exclusive concern that drives a person to look to her own good without regard for others
and in the extreme, even at the expense of others, or it may be a broader concern that
drives a person to see her interest as mutual to that of others.

We have seen that self-interest can be narrow or broad, exclusive or mutual.
Taken together, they point to a third characteristic of self-interest, related to a dimension
of time. Bare preservation is an immediate need. When it is threatened, we take
immediate action, without regard for long term consequences. We seek to preserve our
existence at all costs. When circumstances are so dire that we decide our very existence
is threatened, we may take actions that we otherwise would not—perhaps even actions
that we regret in the future. When circumstances allow us to focus on the broader
concept of self-interest, such as comfort, we may make decisions with a greater sense of
the future in mind. That is, we take into account long term consequences of our actions.
We may be more willing to risk investment of time and resources for these goods. For
example, we may be willing to sow seeds, fertilize, irrigate, and chase pests away, in
order to have better food. We may be willing to gather materials and assemble them

together in order to have better shelter. If we did not have some reason to believe that we

would be alive to reap the fruits of our labor, we would not engage in these activities.

40

Thus, it is when our immediate need for bare preservation has been reasonably secured
that we may begin to calculate and act for the sake of longer-term interests like comfort.

The stark difference between those who calculate self-interest in the narrow,
exclusive, and short term sense on one hand and those who look to the broad, mutual, and
long term on the other is most clear in an anecdote Locke offers, almost in passing. He
tells of a tribe of people who eat their own young rather than nurture them (1T§57.4-18).
This anecdote may be the product of English arrogance and racism in the age of
expansion, but the informative value of the statement is at he level of metaphor. When
facing dire circumstances, self-interest may be so narrow and exclusive that we will harm
others—even eat our young. In a time when we hear news reports of people selling their
children or even prostituting them for drug money, this statement is all too real. Locke
would tell us that the reason is a failure to heed his teaching about self-interest. Society
has allowed conditions to degrade in certain areas so badly that self interest has become
narrow and exclusive and people, figuratively, if not literally, are willing to “eat their
young” for their own narrow and short term benefit.

The Political Dimensions of Self Interest.

The complexity of human self-interest leads to great variety in the way people
deliberate and make decisions. This effects individual conduct, but more importantly, it
effects social conduct and ultimately determines both the limits and the possibilities of
politics. How this effects our relations with others is seen in Locke’s discussion of the
law of nature. As he announces it, “the state of nature has a law of nature to govern it,
which obliges every one, and reason, which is that law, teaches all mankind who will but

consult it, that being all equal and independent, no one ought to harm another in his life,

41

health, liberty or possessions.” Note that he equates the law of nature with reason,which
he elsewhere tells us is “our only star and compass” (1T§58.6). That is, like other tools
of navigation, reason, or the Law of Nature, is used to decide the manner in which we
pursue our interests. Therefore, understanding the Law of Nature helps us to understand
how rational or sensible people will behave. This means that the law of nature is quite
different from the concept it is meant to replace—the natural law. The law of nature is
more like the laws of physics that Galileo and Newton devised to describe how certain
bodies, for example planets, behave in relationship to one another. Newton’s Law of
Universal Gravitation, for example, tells us that if we want to understand the force
generated between two bodies, we must examine the mass of each body and then the
distance between them. Thus, we need two types of information: One in absolute terms
(the masses of each body) and the other in relative terms (the distance between them). In
the case of human behavior, Locke’s Law of Nature tells us to look to the conditions in
which people live, in both absolute terms and relative to one another. This is more clear
in Locke’s restatement of the Law of Nature, where he notes that:
Every one as he is bound to preserve himself, and not to quit his station willfully,
so by the like reason, when his own preservation comes not in competition, ought
he as much as he can to preserve the rest of mankind, and not unless it be to do
justice on an offender, take away or impair the life, or what tends to the
preservation of the life, the liberty, health, limb, or goods of another.
(2T§6.19-25).
We notice three general conditions: First, when there is no competition. We are obligated
to preserve ourselves and others. This is reasonable because there is no incentive to fight.
Second, when there is competition, we may act without regard for the good of others.

Finally, when another’s actions cause direct harm, we may act in a way that directly

harms them.

42

The problem is twofold, partly material and partly moral. Materially, if there is
scarcity of goods, then the third condition exists—mere consumption of any good meets
the strict definition of theft and therefore we may act in a way that harms others,” for
“every man hath a right to punish the offender, and be executioner of the law of nature”
(2T§8.22-24). Conflict is imminent and violence is the only means of settling the
conflict. The second problem is even more serious. Locke tells us that the law of nature
is “in vain” with nobody to enforce it. Therefore, everyone may enforce it in nature. In
other words, since the law of nature is reason, and reason, as we have seen, is in the
service of self-interest, everyone is left to follow his or her personal rational self-interest.
Chaos will ensue unless reason is able to hold a steady course. But this is not the case.
Despite Locke’s early assurance that “calm reason and conscience” (2T§8) will keep
behavior moderate, his elaboration reveals the opposite: people are biased in their
judgements. This means that even if scarcity is overcome, there may still be conflict.
People will still consider themselves to be at risk and may still see others as competitors.
This is owing to an aspect of human nature that Locke explains more clearly in his Essay
Concerning Human Understanding. In the Essay, Locke elaborates on what it means to
say humans are driven by desire. Desire, he argues, “is an uneasiness if the mind for
want of some absent good” (Locke, 1975, Chapter XXI, §31,3-4). Furthermore, unease is
not settled once a particular good is obtained, but instead, having obtained the object of a
previous desire, we immediately discover yet another good that is absent. In other words,
we are never fully satisfied. We are likely to see ourselves as vulnerable and always in

need of acquiring more and more goods, in an attempt to settle our feeling of unease.

 

2' In the Second Treatise it is theft, or an invasion of one’s neighbor’s share to make use
of anything that another needs for survival.

43

Consequently, we are likely to see others as competitors regardless of the wealth we have
already acquired. In this case, reason (the law of nature) will still us to act without regard
for others. Locke essentially admits this much in the Second Treatise, noting that reason
is not always as calm as he first implied, but is instead subject to mistake, passion, and
envy or the desire for revenge (2T§13, 87, 125).

This is likely to be a problem when we focus on the relational aspect of the Law
of Nature——especially as inequality develops when some acquire more and others less.
Those with less, the poor, may come to see those with more, the rich, as having gained at
their expense. Likewise, the rich may suspect that the poor would gladly take from them
what is rightfully theirs. Each comes to see the other as a threat, possibly a thief, and
therefore will be told by reason (the law of nature) to punish his or her rival. This
suggests that left unhamessed, rational self-interest is not sufficient for preserving peace.
Even a person who has come to develop a broad, mutual, and long-term understanding of
self-interest will, owing to insecurity and unease, tend to decay in moral terms into
narrow, exclusive, and immediate interest. This will encourage behavior that, according
to” the law of nature, is antisocial and warlike.

This conjures up a troubling scenario. Consider a single transgression—or even a
perceived transgression. A single passionate observer, interpreting the events and
passing judgement based on his opinion might decide to take action against the
wrongdoer. The person receiving the punishment may strike back, either because he, also
judging in his own case, believes either he is innocent, or if he was guilty, believes the
punishment is too severe. He may also simply act out of revenge against his tormenter.

Others, observing the events may have differing opinions as to the guilt and innocence of

44

both parties and the appropriateness of the punishments. This would give them grounds,
in their own opinions, to punish either the person originally accused of wrongdoing, the
one issuing the original punishment, or both. Yet any action taken by these observers
may lead to further disagreement and fithher punishments. In short order this could set
off a chain reaction of violence that escalates to severe proportions—including death.
This explains why an offense against one is an offense against all. It is not that one is
harmed by the theft of another person’s apple per se, but one is harmed by the threat that
this single act poses to the general peace. If an act sets off a chain reaction, the peace of
everybody is compromised. Locke stated explicitly that the law of nature is “in vain” if
nobody possesses the executive authority: This analysis suggests that the law of nature is
also “in vain” if everybody possesses the executive authority.

The point is that owing to unease, self-interest is dynamic, even fickle. There is
no guarantee that people following self-interest can live in peace. However, there is
some hope for peace, provided three problems are understood and managed: First,
absolute scarcity must be overcome, creating some minimal level of security for all.
Second, society must avoid great disparity of wealth or at least keep the material quality
of life rising for all, even if at uneven rate. This is because people are apt to see
themselves as worse off than they actually are, and others as better off than they actually
are, and therefore conclude that others are benefiting at their own expense. Finally, A
society must avoid conditions where wealth that is accumulated is unsecured. People will
take harsh actions to protect what they have if they fear it is under attack. They will
immediately revert to actions based on immediate, exclusive, and short term self-interest.

Creating and managing the sort of equilibrium these conditions call for is a difficult task.

45

Owing to unease, what is sufficient at one time will not be in another, for people expect
to improve their conditions over time. What is more, as people develop differently,
owing to variety in tastes and desires, the diversity among people will intensify.
Managing these differences will become more complicated and more delicate as a society
becomes more complex over time.

This reveals a subtle, but very important point regarding Locke’s teaching of the
State of Nature, Civil Society, war and peace. Creating society is not enough to assure
that war is ended—and war is never ended permanently. Therefore the challenge for
political society is not simply preserving society itself, but maintaining it as a peacefirl
society. Unlike Hobbes, who is more explicit that the state of nature is simply a state of
war,22 Locke invites the reader to see greater distance between them. He writes that “the
state of nature and the state of war, which however some men have confounded, are as far
distant as a state of peace, goodwill, mutual assistance, and preservation; and a state of
enmity, malice, violence and mutual destruction are one from another” (2T§19.1-5).
While too cautious a writer to mention Hobbes by name in this passage, it would seem
Locke is attempting to distance himself from his more reckless predecessor. Locke is
explicit that conditions of war. or peace may exist in both nature and civil society. In his
words, “want of a common judge with authority puts all men in a state of nature; force
without right upon a man‘s person makes a state of war both where there is, and is not, a
common judge” (2T§19.22-25).23 So the distinction between nature and society is the
absence of a common judge in the former. The distinction between peace and war is the

use of force without right in the latter. For this reason, it is important not to think of the

 

22 See Leviathan, Chapter 13.
23 See Goldwin, 1987.

46

state of nature as a historical period that permanently comes to an end with the creation of
civil society, and it is even more important not to assume that war and peace correspond
exclusively to either condition. Nevertheless, given that the slightest miscalculation can
set off the chain reaction, and given man’s natural propensity to miscalculation and
personal bias, there is cause to doubt that the state of nature is very far from the state of
peace after all. Indeed, peace in nature would appear to be very fragile. Thus, in order
for Locke’s statement to be true that nature and war are as distant as peace, goodwill,
mutual assistance, and preservation are from enmity, malice, violence and mutual
destruction, we have to read it in a different, far more shocking light: Just as nature and
war are not far apart, peace and goodwill are not far from enmity and malice.

Perhaps Locke lists these conditions in a specific order, as a function of how self-
interest reacts within what might be called our horizon of security. Self-interest, as we
have seen, is ultimately concerned with preservation. However, as our security increases,
self-interest is afforded greater breadth, and this breadth allows incrementally more social
behavior. Thus, when our horizon of security is very narrow, self-interest must focus
narrowly on preservation since the narrow horizon allows impending danger to be, quite
literally, too close for comfort. However, if we become more comfortable, that is, more
certain that our immediate preservation is secure, if we have less reason to see others as
an immediate threat, self-interest will allow us, and perhaps even encourage us to
cooperate in the limited sense of mutual assistance. This may mean that we agree to
trade with others or cooperatein activities that lead to the goods of our next highest
concern, subsistence. If this bears fi'uit, literally and metaphorically, and we are more

secure with regard to both our immediate preservation and our access to the goods of

47

sustenance, this pushes our horizon of security back even further, thereby broadening the
actions agreeable to our rational self-interest. Others will seem even less of a threat. As
a result, we may find greater and more sophisticated ways to cooperate, perhaps in
producing the goods Locke says are next in importance, goods of comfort. In such an
atmosphere we may even come to regard others with goodwill. Finally, as we maximize
our horizon of security, the goodwill may develop into peace. However, the fragility that
Locke calls to our attention also suggests that if these conditions are not managed
properly, people may come to see others as incrementally more threatening, thereby
reducing their horizon of security and causing rational self-interest to become narrower
and narrower. Thus, people will act incrementally more harshly, bringing about, in
descending order, conditions of enmity, malice, violence, and mutual destruction.24
Maintaining these conditions therefore requires an acute understanding of self-
interest. Lingering insecurity will naturally incline people toward narrow self-interest and
lead them to act only for narrow, immediate, exclusive, interests. At the extreme, this
would render society impossible. If society is maintained, but in its most unhealthy
condition, they will only act to benefit themselves, their family, and an immediate circle
of fiiends, which is socially problematic. Ironically, this means that people will organize
for collective action, but only for a narrowly defined purpose—not for the interest of the

society as a whole. This is the very problem James Madison analyzed in Federalist #10,

 

24 This phenomenon is also present in one of the classic works of rational choice theory,
Robert Axelrod’s Evolution of Cooperation (1984). Axelrod argues that the likelihood of
any two people cooperating in the absence of central authority increases as the

probability increases that they will meet again in the future. Likewise, as the probability
of meeting again decreases, the incentive to take advantage of another gets stronger, i.e.
people have greater reason to act on narrow self-interest owing to a constrained time
horizon. This would also appear to support Banfield’s general proposition.

48

naming such organizations factions. The control of factions requires that leaders broaden
or enlarge people’s views. That is, the liberal republic must enlighten self interest to
behave in a way not expected if left to natural inclination. Madison’s lesson in Federalist
# 10 assumes some ability to manage self-interest. It takes for granted a certain moral
character among the citizens, without directly explaining what that character is or how it
is to be fostered.

Madison: Self-Interest and the Problem of Factions

The discussion so far reveals a critical challenge for liberal regimes: They must be
organized so that rationally self-interested people are able to live in peace and work
together to promote prosperity. As we saw, this requires great care because rational self-
interest is fickle and can just as easily lead to enmity as goodwill, conflict as cooperation.
This is further complicated by the fact that even as people are motivated by self-interest,
they do not always take action as individuals. Rather, they often come together into
groups to make competing demands of the regime.

The role of group politics is not comprehensively covered in Locke’s political
writing, but it is the primary focus of James Madison’s contribution to liberal theory.
Madison’s criticism of the Articles of Confederation is that the document created a
central government too weak to resist the domination of certain organized interests
(Madison, 1987b). His fear was that unless this was corrected, America would suffer the
same fate as the earlier republics catalogued in Federalist #9. With this in mind he
helped to draft the new Constitution and then took charge of its ratification by
collaborating with Alexander Hamilton and John Jay in writing the Federalist Papers.

These essays can be read narrowly as persuasive attempts to win over the citizens of New

49

York. They may also be read as an important commentary on the intent of the delegates
who met in Philadelphia to draft the Constitution. However, it is also appropriate to read
them as the most comprehensive attempt to ground the new Republic in the
Enlightenment’s understanding of human nature. It is this reading that makes the
Federalist Papers a philosophic text in its own right, and it is this reading that guides the
present study.

Although Madison was writing primarily with the central government in mind and
he had very little to say about local government, there is much that students of urban
politics can learn from his thought. The study of groups has been a concern of urban
politics since its emergence. Pluralists offered one theory explaining how groups obtain
and use power. In Chapter One the case was begun that pluralism, when understood as
a strategy for policymaking, poses a normative problem for liberal society: It encourages
a process that divides groups against one another, sharpens their self-interest, and thereby
reduces the effectiveness of policy and invites resistance from those who see their narrow
interests as adversely effected. Here the case is developed to show that Madison would
hardly approve of the work of contemporary pluralists who often cite him as their
intellectual father. A complete understanding of Madison reveals the errors
contemporary pluralists make and lays the groundwork for a correction.

The present analysis therefore serves three important purposes: First, it picks up
where Locke left off and completes the study of rational self-interest. Second, it offers an
interpretation of Madison’s thought often misunderstood by scholars. Finally, it
completes the connection of regime theory to the principles of liberalism by considering

the way bourgeois citizens interact in the political context.

50

l

The three points are connected: with a proper understanding of rational self-
interest, we are prepared to appreciate better the normative problem that leads to
systematic bias. With this understanding, we may correct the pluralists and begin to draft
a strategy that seeks to reduce systematic bias. This strategy must include a proper
understanding of how diverse interests form groups, how these groups interact in the
political arena, the dangers these interactions pose to liberal society, and the best way to
reduce those dangers. This is what regime theory seeks to do as it attempts to understand
how groups get and use power and the relationship between power and socially
productive policy outcomes. In this regard, regime theorists, more than any others, seek
to understand and apply the lessons offered by James Madison, particularly in his
Federalist # 1 0.

The Origin of Factions and the Threat They Pose

The subject of Federalist #10 is factions. Madison defines a faction as “a number
of citizens, whether amounting to a majority or minority of the whole, who are united and
actuated by some common impulse of passion, or of interest, adverse to the rights of
other citizens, or to the permanent and aggregate interests of the community” (10:54).25
The essay, however, is about more than defining factions. It is also about explaining their
source, the danger they pose, and offering a strategy that deals with the problem of
factions without undermining the ideas of liberal republicanism. In that sense, Madison’s
essay fits the contemporary idea of multidisciplinary study: It begins with a philosophic
consideration of human nature, explaining the forces that shape our preferences and the

decisions we make. It next assumes the role of a psychological text in that it explains

51

why people disagree when faced with a common decision. Yet it is also a sociological
study in that it details how disagreements lead to the formation of groups, and finally, it is
a work of political science in that it demonstrates how groups gain and use power in a
modern republic. At the same time, the essay is both empirical and normative: It
describes the world as we find it, but also as we would like to find it. Finally, the essay is
both diagnostic and prescriptive: It illuminates a problem and then offers a strategy for
dealing with the problem.

Madison tells us that “as long as the reason of man continues fallible, and he is at
liberty to exercise it, different opinions will be formed” (10:55). The interplay between
reason and self—interest is largely to account for factions. This is reminiscent of Locke’s
declaration that reason is our “star and compass” meaning it guides us to our desires.
However, people have different desires depending on their experience and the
information available to them.26 Recall Locke’s demonstration that reason guided parents
to care for their young in one situation and eat their young in another; reason prompted
people to kill each other in the context of the state of nature and to aid in mutual
preservation in the context of civil society. Thus, reason is not an independent, external
force operating free of the passions. If it were, people would be able to process identical
information to arrive at identical conclusions. Two calculators can be fed identical
information, such as 1+1 and arrive at identical conclusions, 2, but two humans can not
necessarily be fed identical information regarding a matter such as gun ownership and

arrive at identical conclusions. Some will think gun ownership is an absolute right;

 

25 Citations to the Federalist Papers will consist of two numbers separated by a colon.
The first number is to the particular essay and the second number is to the corresponding
page number of the Modern Library edition.

6 See also Locke’s discussion of how our senses and reason function lT§86.9-15.

52

others will think it should be strictly regulated if not banned. Both are rational in the
sense we have been discussing, but have arrived at different conclusions either because of
different information (one might be aware of crime statistics and the other statistics
regarding gun injury), different experiences (one possibly being the victim of a crime

who now believes she could have prevented it had she been armed; the other having a
child who was killed in a drive-by shooting), or a combination of the two.27 If we could
speak of reason as some external or controlling force, then either the two parties would
agree on the issue, or it would be possible to say that one has reached a rational
conclusion and the other has reached an irrational conclusion (i.e., reason successfully
guided the one but broke down in the case of the other). Simply put, if reason were an
external force, there would be agreement on issues in politics much the same way there is
agreement on calculation in mathematics.

Madison continues, noting that “as long as the connection subsists between his
reason and his self-love, his opinions and his passions will have a reciprocal influence on
each other; and the former will be objects to which the latter will attach themselves”
(10:55). This explains how the formation of groups follows from differing opinions.
Consider this from the most basic level: Whenever two people discover that they differ
on an issue, each will have a certain attachment to his or her own opinion. Both may
acknowledge that flawed reason is to account for the disagreement, but each will assume
the other suffers from this malady. That is, the first person will decide that he has

reached the correct conclusion, but his rival suffers from flawed reason whereas the

 

27 Alexander Hamilton seems to agree with this as he writes in Federalist #1 : “so
numerous indeed and so powerful are the causes which serve to give a false bias to
judgement, that we, upon many occasions, see wise and good men on the wrong as well
as on the right side of questions of the first magnitude” (1:4).

53

second person will assume she is correct and it is his reason that is flawed. Self-love, or
vanity, makes us assume we are correct and those who disagree with us suffer from
flawed reason. However, vanity works in another way as well: it makes us
uncomfortable to be aware of disagreement. We want to prove to others that we are
correct. Since we can not do this through argument (since we assume we are dealing
with people with flawed reason) we must do it with number. Therefore we seek the
confirmation of others who agree with us. However, if one sees another, with whom he
disagrees, uniting with others who share an aberrant opinion, the natural reaction is to
seek confirmation of one’s own, by finding others who share one’s “correct” opinion.
Thus, fallible reason leads to disagreement, which in turn leads to group formation.28

Yet, like individuals, groups are seldom content to agree to disagree. Instead,
rival groups follow passions that have “inflamed them with mutual animosity, and
rendered them much more disposed to vex and oppress each other than to cooperate for
their common good” (10:56). If we can not get others to think our way, we may settle for
getting them to behave in a particular way. Therefore, in a republic, where the people
have access to the workings of government, groups will attempt to use the force of law to
control the behavior of others. Literally, our strongest desire may be to convince those
who disagree with us that we are correct, but lacking the ability to do that, we settle for
second best: we pass laws that force rival groups to conform to our preferences. It is for
this reason that Madison calls factions the greatest threat to liberty in a republic: As the

state allows itself to fall under the sway of powerful factions, and as it gives official

 

28 See also John Jay’s agreement with this sentiment in Federalist #3 where he warns that
pride will keep interests from “acknowledging correcting, or repairing their errors and
offenses” and will “naturally dispose them to justify all their actions” (3: 17).

54

sanction to one set of preferences over others, it violates the limited nature of liberal
republican government.

However, any regulation made in this manner will offend the vanity (and in
effect, the reason) of those in the minority. Therefore, those on the losing end—the
minority faction—grow resentfiil. People may tolerate occasional and minor intrusions
into their liberties, but will not accept it for long. Eventually, people will resist what they
consider encroachments on their liberties.29 This gives way to a deeper problem. Once
resentment for authority develops, it makes little distinction in terms of justice. As we
saw in the discussion of Locke, people judge poorly on their own behalf. Therefore, once
a spirit of resistance is born, even for good reason, people may very well begin to see
every law as an encroachment on their rights and a cause for resistance. This will lead
people to undermine the intentions of otherwise productive policy.3O Thus, there is a dual
threat to the stability of the regime: One being the danger of factions trampling the
common good with the force of law, the other being factions undermining law that serves
the common good thereby interfering with government’s ability to fulfill its obligations
under the social contract.31 In the end, the inability to solve the problem of factions will

threaten the legitimacy of a government founded on the idea of natural rights.

 

29 In Lockean terms, such policy is founded on force without right, which is the definition
of the state of war (2T§19).

30 Compare with Madison’s warning that “no man is allowed to be a judge in his own
cause, because his interest would certainly bias his judgement, and, not improbably,
corrupt his integrity” (10: 56).

3‘ Stone’s study of Atlanta (1989) offers examples of just such injustices. In the urban
renewal era some factions were able to benefit at the expense of others (16) and in the
fight over historic preservation, certain factions blocked a program that would have been
in the interest of all (126).

55

As will be discussed in detail below, this has become the problem of urban
America. The public sphere in urban areas has fractured into several smaller spheres,
which are too anemic to control the effects of factions. As a result, urban policymaking
has reflected the preferences of a small number of groups, each getting its way
periodically at the expense of effective problem solving, which is to say the expense of
the public interest. As a result, not only do urban areas continue to serve as the site of
our most prevalent social problems, but they also show to the greatest extent the sense of
illegitimacy that always threatens stability in a republic. For these very practical reasons,
Madison’s teaching has particular relevance to those interested in urban politics. Yet, he
warns that these safeguards are less useful in local government (10:61). The institutions
he focuses on are national institutions. However, as will be shown, the institutional
safeguards are the third line of defense following the procedural and moral safeguards.
These more important lessons can be applied to local government.32

The Cure for Factions

Madison considers three possible cures for the problem of factions. Two possible
solutions involve removing the causes of faction. On one hand, we might remove the
liberty that makes factions possible; on the other, we might require that all citizens have
the same opinions, passions, and interests. He rejects both of these plans—the first on the

grounds that the cure is worse than the disease and the second on the grounds that it

 

32 We may still make inferences about the role of institutions based on their relative
ability to fitlfill the procedural and moral expectations of commercial republics. For
example, city manager systems may be less receptive to open access and dialogue and
therefore less likely to promote social learning. This is what Stephen Elkin (1987) found
in his study of Dallas.

56

would be impracticable (10:55). This leads him to the third possible solution: controlling
the effects.

To control the effects, Madison recommends that America become an extensive,
commercial republic. This requires enlarging the size and complexity of the regime—
“extending the sphere” as he calls it. The reason is simple:

extend the sphere and you take in a variety of parties and interests; you make it

less probable that a majority of the whole will have a common motive to invade

the rights of other citizens; or if such a common motive of citizens exists, it will
be more difficult for all who feel it to discover their own strength and to act in

unison with each other. (10:61)

In short, by creating a large regime, where many people have diverse interests, it
becomes unlikely that any single faction will arise that can dominate politics to the extent
necessary to oppress others. In simple terms, there will be no permanent majority.

There are two components to the cure: The first is a procedural component, which
relies on the complexity of the commercial republic to make it difficult to organize and
sustain factions. It is on this component that most scholars focus, particularly pluralists
(Dahl, 1961). Yet this only works when joined with the subtler, moral component of
Madison’s teaching.33 Madison has in mind that citizens in a commercial republic will
come to have what we may call democratic temperament. In the narrowest sense, this
stems from self-interest: we realize that we will not always be in the majority and the

thought of occasionally being in the minority moderates our behavior.34 But the more

important aspect of democratic temperament stems from the counterpart to self-interest:

 

33 More recent scholarship among communitarians has begun to call attention to this
point as well. See especially Sandel, 1988, 1996.

4 How to bring about and institutionalize moderation is one of the dominant themes of
the Federalist Papers. Hamilton tells us in the first essay that Publius seeks a
“circumstance [that], if duly attended to, would fiirnish a lesson of moderation to those
who are ever so much persuaded of their being in the right in any controversy” (1:4).

57

vanity. This both gives rise to the diversity of interests and also keeps the diverse
interests in close proximity to one another. It also tempers the intensity of our opinions.
That is, democratic temperament first influences the location of our preferences, and then
it affects the degree of strength with which we hold them. In terms of location, there are
two equal and opposite forces at work. On one hand there is a force that decentralizes
interests in the regime; on the other is a force that holds them together. In terms of
intensity, there are again two forces: On one hand we are strongly attached to certain
general principles; on the other, we are more tepid in our attachment to specific details.
Thus, the ideal moral conditions exist when there is a diversity of opinion, but the
diversity is made up of people whose views differ only slightly, meaning any given
interest is relatively close to any other interest. Furthermore, the ideal moral conditions
exist when people are moderate in their attachment to their own opinions, meaning they
are willing to accept views that differ, at least slightly, from their own. Absent these
conditions, the procedural cure outlined in Madison’s discussion of the extended sphere
will not likely solve the problem of faction for very long. This analysis lends itself well
to spatial modeling.
Diagramming Madison ’s Model of Republican Government.

An extensive republic will by definition encompass a large amount of territory
with a diverse geography and it will be composed of a large number of people.35 This

will allow it to contain a large number of interests, which means the public agenda will

 

35 While John Locke was perhaps the most significant general influence on the thought of
the founders, the philosopher cited most in the Federalist Papers is Montesquieu. The
consideration of geography and climate as they relate to commerce and the mores of a
people is clearly more attributable to Montesquieu’s influence. See especially Book 18
of Spirit of the Laws (1989).

58

include a variety of issues. Generally speaking, as the population increases and the
number of issues increases, the likelihood of a permanent majority decreases. In the
simplest sense, consider a regime composed of three people, A, B, and C and an agenda
composed of three issues: taxes, criminal justice, and education (See Figure 1).
Furthermore, let us assume that for each issue, there are two alternative positions. For
example, in the case of taxes, one position is that the regime should have higher taxes to
pay for a greater number of public services, and the alternative is that there should be
lower taxes and fewer public services. If we assume that any issue is decided by a bare
majority, it will require two out of three people to render a decision. Now, it is possible
that persons A and B unite in favor of lower taxes. However, just because A and B agree
on taxes, it does not follow that they must necessarily agree on criminal justice. Consider
the position that criminals should be punished in formal institutions or the alternative that
criminals should be rehabilitated by keeping them in community based institutions such

as half way houses. Perhaps B and C unite in favor of community based systems.

Finally, consider two alternatives in education policy: we might craft a system that
requires all children to receive a uniform public education, or we might leave education
to the private market. Just because A and B agreed on tax policy and B and C agreed on
criminal justice policy, we can not assume either pairing will hold for education policy.
Indeed, it is possible that C and A, who agreed on neither of the other two issues, form
the majority this time. Thus we see that even though a majority decided each issue, there

was no single majority that decided every issue. As a result, each person was in the

59

 

 

 

 

 

Figure 1: No Permanent Majority in a Simple System.

60

 

36 If this is the case in the simple regime of three people

majority two out of three times.
and three issues, consider the sort of regime Madison recommends, where there is a large
population taking in a large number of issues and making decisions through
representatives.

A second factor making permanent majorities unlikely is that issues, in an
extensive republic, are not likely to reduce simply to two alternatives. This is a function
of the same force that causes people to disagree in the first place, flawed reason. It is not
likely that reason will be flawed in a manner that divides people neatly into two groups
on a given issue. Rather, we can expect that the variety of experiences and the differing
amounts of information available to people will lead them to a great variety of positions
on a given issue. As people discover these distinctions, they will form a variety of
groups, each holding slightly different views. Furthermore, it is likely that no group will
perfectly reflect the views of every member. Instead, people will join the group that best
reflects their position—and the strength of their support for the group will likely be a
function of the degree to which it matches their views. This means that in any group
there will likely be some core segment that is more active and then a peripheral segment
that is less active. This makes it more difficult for any group to act quickly and

decisively.37 In political terms, the multiplicity of interest groups surrounding any single

issue means that decisions are unlikely to be made by any single, powerful group, but

 

36 This is similar to the paradox noted by French mathematical philosopher Condorcet.
For a lucid analysis, see Riker, 1982. Much of the literature on Condorcet’s Paradox
implies that it is a problem for democratic government (Shepsle and Bonchek, 1997;
Barry and Hardin, 1982). However, it need not be a problem for republican government.
In fact, the present analysis suggests it may be a desirable thing.

37 In this sense, it is desirable that groups face a problem of collective action, for it slows
them down and renders them less likely to dominate the agenda. Although he does not
share this normative position, see Olson, 1971 for a very useful discussion.

61

rather by coalitions of groups who find sufficient mutual interest. That is, politics
becomes a matter of compromise for the sake of weaving several groups together. This is
the impulse that pluralists pay attention to—but at the expense of the rest of Madison’s
teaching, as will be argued below.

The formal characteristics of republicanism, as opposed to pure democracy, also
render permanent majorities unlikely. In a republic, people must elect a representative to
govern on their behalf. Given the diversity of issues that will be present in an extensive
commercial republic, there is less opportunity for a single issue to dominate an election.
Let us assume that two candidates are vying for legislative office. One offers as a
campaign issue a proposal catering to the narrow interests of a particular faction and
contrary to the public good. The only way this candidate will win is for her issue to
appeal to a majority of the voters, be communicated to them, and be important enough to
them that it does not matter if they disagree on other aspects of the candidate’s platform.
In other words, a majority might support the unjust issue, but if they disagree with the
candidate’s position on several other issues, they will only vote for the candidate if they
are much more strongly attached to the unjust issue than they are to all of the issues with
which they disagree. As we have seen, democratic temperament is intended to
discourage this sort of single-issue politics. This is compounded by the element of
representation, for even if a great many people feel some unjust desire, abandon their
shame and manage to organize around it, they are afforded some degree of anonymity by
virtue of being in a group. However, that anonymity is stripped away from any person

who seeks office as a representative of that group. Thus, shame first acts to prevent

62

organization, and then serves as a second line of defense by preventing representation
should the first defense fail.

Finally, bicameralism, federalism, and the separation of powers work against the
possibility of permanent majorities. Even if, from time to time, an unjust faction is able
to organize and elect a single representative intent on using the force of law to carry out
acts detrimental to the rights of others or the common good, there is another barrier in the
institutional design of American government. In order to enact legislation friendly to a
narrow and unjust interest, it would take a majority of legislators to support it. That
means that the unjust faction would not only have to elect one member of the legislature,
but many. Even at the time of the founding, when the nation was far smaller, this would
have been very difficult given the diversity of interests. Furthermore, even if one
legislative chamber were occupied by a corrupt majority, the other chamber would hold a
check over it—and the executive and judicial branches would hold further checks (see
Federalist #51). Thus, the only way to have an unjust faCtion seize control of
government would be to organize across a large amount of territory and sustain itself long
enough to capture a majority in the House and Senate as well as the Presidency.38

Still, the more important lesson lies not in the institutions per se, but the micro-
level procedure of decision making. Consider again an issue that must be decided among
three parties. As shown in Figure 2, each will have an initial, ideal position—a position
that he or she would make the outcome if empowered to decide alone. Each person will

also be willing to deviate from that ideal position some amount. We can represent the set

 

38 This is the aspect of Madison’s thought that is least applicable to local government
given the differences in institutional design. This is not to say that institutions have no
bearing on the subject of factions at the local level. This topic will be taken up in detail
in Chapter Six.

63

 

 

 

Figure 2: Indifference Curves for a Three Party Decision.

64

 

of possible outcomes, each of which is acceptable to a particular party, as an indifference
curve: a path of points equidistant from the preferred point. Any outcome lying on or
inside an actor’s indifference curve would be acceptable; any outcome outside the
indifference curve would not be acceptable (Stokey and Zeckhauser, 1978, 28-33, 266-
270). Figure 2 shows a possible set of indifference curves for three parties. If a simple
majority (in this case two out of three) must agree on an issue, then the only possible
outcomes lie in the regions where any two indifference curves overlap. In regime terms,
this is the solution set for the issue (Jones and Bachelor, 1993, 15-19).

Figure 3 uses the same spatial model to reveal a serious problem from the
normative perspective: The solution set for procedurally expedient outcomes might not
contain the best solution to the problem. In the first case, it could be that of the three
parties involved in the decision, the best solution is inside the indifference curve of
Person C at the location marked *1. However, if she proposed that solution, she would be
outvoted by Persons A and B because the proposal is outside their indifference curves.
More troublesome is the possibility that the best solution is outside the indifference
curves of all three parties to the decision, such as the location marked *2. If the agenda is
made up of all proposals that are inside any person’s indifference curves, and only the
proposals that make it onto the agenda get discussed, then it follows that plenty of
potential solutions never get discussed because the advocates of those positions are not
involved in the decision process. That is, those proposals never make it onto the agenda.
In effect, this means that the proponents of those ideas are deprived of their voice in
public affairs. It may not be too harmfiil if one is blocked from the public agenda on a

single issue, but if the same people are continuously deprived of access to the agenda,

65

 

 

 

 

Figure 3: Systematic Bias in a Three Party Decision.

66

 

there is a serious problem. In regime terms, the agenda is systematically biased against
those interests, and as a result of systematic bias, effective problem solving is rendered
less likely (and in this case, impossible). In normative terms, there may be no permanent
majority, but there may very well be a permanent minority—a group whose views never
get reflected in policy outcomes. This is contrary to the principles of modern
republicanism, and, given the initial discussion of the danger of factions, a condition that
could undermine legitimacy and stability in a regime.39

Figures 4 and 5 demonstrate the full virtue of Madison’s procedural teaching. In
Figure 4 we see that the addition of a single new voice marks the beginning of the
extended sphere. Figure 5 shows that yet another voice broadens the agenda even more
and opens new possibilities that were not available in the regime diagrammed in Figures
1 and 2. The extended sphere of this regime takes in a greater variety of interests and
thereby faces a greater likelihood that the best solution will be on the agenda. Assume
the five interests, represented by A, B, C, D, and E must make a majority decision (three
out of four must agree). In this case, the solution *1, which was not viable in the three
person scenario, is now politically possible, since it falls inside the indifference curves of
C, D and E. Likewise, the solution *2 which was not even known in the three person
scenario is at least articulated by person D. It must be noted that this does not ensure that
the best outcome will be selected; it only opens the possibility that did not exist under the
earlier scenario. One need only continue this logic as a thought experiment to realize that
extending the sphere even fiirther will bring a greater diversity of interests into the

process, reduce systematic bias, and improve the likelihood of productive outcomes.

 

39 The definitive work on this topic is Elkin (1987). Exactly whose voices are kept out of
the debate due to systematic bias will be discussed in Chapter Four.

67

Still, reducing systematic bias is a necessary, but not sufficient condition for actually
selecting the best outcome.40

It is crucial that the important distinction between a republic and a democracy be
understood. It is true that the republican process is more democratic as it adds more
voices to the process, but this is not to say it is simply democratic. Afier all, a simply
democratic system might add more voices, but they might be voices of people holding
preferences identical to persons A, B, or C. That is, even though more democratic in the
strict sense, this would not promote greater diversity. Indeed, twenty additional voices
each identical to the three existing voices would be far more democratic, but far less
desirable than a single additional voice expressing a different preference.41 So far the
discussion has focused on the procedural aspect of Madison’s teaching. Let us now
return to the moral aspect to see how the two are intended to work in tandem.

The possibility of agreement is more likely if each group’s indifference curves are
of greater radius, meaning people are less strongly attached to their ideal preferences.
Figure 6 illustrates this point. The three interests are each located by the point
representing their ideal preference. In each case, there are two sets of indifference

curves, one is a much smaller path of points (the broken line) and the other is much more

 

40 A cautionary note is necessary. Simply adding voices with alternative preferences is
not sufficient, for additional voices could just as easily carry the process away from the
best outcome as toward it. This suggests the greater importance of political leadership in
the sense of knowing which interests will be most conducive to social production. One
problem with relying on enlightened statesmen to assemble the right interests for the sake
of social production is expressed in Madison’s own words: “enlightened statesmen will
not always be at the helm” (10:57).

4' Actually, a multitude of voices all holding the same preference may appear
procedurally more democratic, but may “drown out” other voices and undermine the
more important democratic outcome. In this sense, if we value democratic outcomes, the
best procedure for getting them is republicanism, not democracy. See Federalist #58,
especially page 382.

70

 

 

 

 

Figure 6: Strong versus Weak Preferences.

71

 

broad (the solid line). This reflects two different degrees of strength that the groups may
have for their ideal preferences. Notice that where the indifference curves are narrower,
where the groups hold their preferences more strongly, there is no overlap. Thus, as long
as these positions are held, there is no way two or more parties could share in a collective
decision; cooperation is impossible. However, where the indifference curves are broader,
groups hold weaker preferences, and there are numerous places where two and even three
indifference curves overlap. Thus, as preference strength decreases, the possibility of
cooperation increases.42 This demonstrates graphically the point noted earlier that the
extensive republic is intended in part to dull down passions.

To summarize, much of the lesson of Federalist #10 deals with a procedural
strategy for the extensive republic. It is a strategy that offers, in Madison’s words, “a
republican remedy for the diseases most incident to republican government” (10:62). Yet
the procedural strategy relies on an understanding of the moral lesson of republicanism,
the creation of citizens with a democratic temperament. These citizens will hold diverse
opinions, but the not so diverse that they are overly distant from one another. They will
be deeply attached to the general principles that underlie their opinions, but they will not
be too rigidly attached to the details of their opinions. With such a temperament, there is
greater opportunity for inclusiveness in the decision process and compromise in the
outcomes. Those who pay too little attention to the moral lesson and focus too narrowly
on the procedural lesson are therefore likely to arrive at a flawed interpretation of

Madison’s teaching. The most prevalent example of such an error is the pluralist school.

 

42 It is also worth noting that we are more likely to get agreement among a greater
number of parties if initial preferences are closer together.

72

For reasons that we shall turn to next, Madison would hardly approve of pluralists’
teaching, even though they generally claim to be his progeny (Dahl, 1956).
The Problem with Pluralism
Pluralists focus too closely on the procedural aspect of Madison’s teaching. As a
result, they portray republicanism as a system wherein groups simply compete against
each other issue after issue. This leads pluralists to pay attention to policy outcomes only
inasmuch as they tell us which groups win and lose. In effect, policy outcomes serve as
the pluralist scorecard. Following scorecard mentality, republican stability requires
careful refereeing of the various groups to ensure that each dominates a sufficient amount
of time. However, this means that pluralists have little to say about the content of
outcomes and whether they actually improve whatever condition brought about the need
for policy action in the first place.43 Furthermore, the pluralist interpretation neglects the
importance of minority opinion in influencing the content of outcomes.

Perhaps the most important difference between pluralism and Madison’s idea of
republicanism is the impact each has on minority opinion and the tone of policy
discourse. Pluralists would have us believe that the policy process is akin to the
children’s game “king of the mountain” where players fight their way to the top, enjoy a
single moment of domination, and then take turns knocking each other off. This is not

What James Madison intended. Instead, he sought to create a system wherein interests are

 

 

43 One might even compare the pluralist strategy to that of machine politics. The famous
Ward heeler of Tammany Hall, George Washington Plunkett openly bragged that he did
not Concern himself with policy arguments, but rather focused on doing favors for his
conStituents (Riordon, 1963). Like the pluralists, the goal was appeasement for the sake
of political expedience. This raises doubts regarding the accomplishment of the Reform
Movement which sought to destroy the machine and laid the groundwork for city

go"ernment that has embraced the strategy of pluralism. This topic is examined more

Closely in Chapter Six.

73

substantively represented in the deliberation. The difference is that in the king of the
mountain version, the outcome is not effected by the number of interests involved in the
decision, for whatever interest prevails simply enacts its preferred position without regard
to the (defeated) minority opinions. In effect, the only significance the number of players

has is on the frequency of each player winning (and only then if the added players are

strong enough to fight their way to the top periodically).

The pluralist strategy also poisons the nature of political communication and the
tone of the discourse. Communication becomes the means to victory. Under pluralism
the goal is not to educate one another, shape preferences, discover common advantages,
and therefore arrive at policy outcomes that are collectively beneficial. Rather,
discussions are about tradeoffs: who made concessions on the preceding issue and who is
“due” victory in the present case. In this sort of communication, we could reconsider the
three party decision process from Figure 1 and realize a certain danger. If A and B use
the fact that they agree on the first issue, taxes, as a basis for negotiation on future issues
of crime and education, they might strike a perverse deal: They might form an alliance
such that whenever they disagree on an issue, they take turns each supporting the other’s
position regardless of the content (logrolling). If this is the case, when we move on to

crime policy, perhaps A supports B in exchange for B’s support on the education issue in
the future. Now B, knowing that she will have the support of A, is free to set policy at
her preferred outcome, without consulting C at all. Likewise, on education A is able to
Set policy at his ideal outcome without consulting C. In effect, there is still no permanent

maj Ority, A and B each get their ideal preference half the time, but C is rendered a

74

permanent minority and might as well not participate at all."4 The outcomes in such a
scenario will tend to be very close to if not exactly the ideal points of whichever interest

is “due” to win on a certain issue, meaning the vast majority of alternative solutions go
unexplored. The resulting policy is made in the interest of a subset of the whole society
and may very likely be adverse to the interests of others or the common good: It is the
very definition of Madison’s factionalism. 45

In the Madisonian model, the number of interests involved in the process does

affect the content of the outcome. Consider a decision made by three parties. We have
seen that as soon as two out of the three recognize some common ground, they could
simply negotiate the outcome as if the third were not involved. If, for example, A and B
recognize common ground and agree to decide based on that, the outcome would be the
same regardless of whether C were ever involved in the process. This is like king of the
hill: C was pushed off the hill early and has no impact on the rest of the game. Yet, if we
follow Madisonian principles, it is desirable that A and B, even if they did share
considerable common ground, not recognize the degree to which they agree. This is
accomplished by having a larger number of interests in the process, preventing the sort of
Contact that would allow recognition. This creates opportunity for minority interests. As
Figure 7 illustrates, if A and B are forced to negotiate with C, then C can make both A

and B more aware that they share some common ground with it. This will prevent A and

 

 

44 This seems to be what Clarence Stone found in his Atlanta study. During urban

r enewal, most of the land went to white owned business interests. As a side payment to
black businessmen, some land was given to historically black Atlanta University. This
Was of little consequence, however, to the poor minorities who were displaced and

$1511] ikely to go to the university. See Stone, 1989, 40.
e This is the sort of political communication Madison hopes to render unlikely in the
xtensive commercial republic by making it “more difficult for all who feel it to discover

t - . . .
heu- own strength, and to act in umson With each other” (10:61).

75

 

 

V

 

Figure 7: Impact of Minority Preferences on Outcomes.

76

 

B from cutting C out of the process. Therefore, C may be able to move an otherwise
undesirable outcome *1 toward a less offensive outcome, *2 or even an acceptable
outcome *3. Even if C shared little or no common ground with the other parties initially,
it could use persuasion and education to shape their preferences, moving their ideal
points, broadening their indifference curves, or a combination of the two. Thus, even if
C, in the end, does not get its preferred outcome—even if the outcome is still outside its
indifference curve—the outcome may be more agreeable than it would have been had C
not participated (and most important, the outcome would likely not be so offensive to C
that it would have reason to resist the policy).

This exposes the great danger of the pluralist strategy: It encourages behavior
clearly at odds with democratic temperament. Whatever group outmaneuvered its rivals
would be practically free to implement its ideal position. Put another way, the system
would be essentially zero sum with clear winners and losers, and the winners would have
little incentive to compromise or be moderate in terms of the outcome. In formal terms,
groups would not have very wide indifference curves. Therefore, as groups realize that
they have little chance of winning on a given issue, they have little reason to stay
engaged in the process. Just as smaller children find little reason to continue playing king

0f the mountain. The political consequences are grave. Weaker voices are pushed out
and then, as political discourse takes on an increasingly belligerent tone, moderate voices
0f democratic temperament grow alienated and also drop out. This suggests that the
voices that do remain will belong to the groups possessing the strongest opinions, and
likely the most radical opinions. That is, the middle will exit, leaving the debate to take

p lace among uncompromising, marginal voices. For this reason, whoever loses will be

77

more likely to harbor ill will. At the very least they will demand a side payment—some
special benefit from government. More likely, after they lose the formal debate they will
refiise to concede, instead shifiing the “battle” from the policy making process to the
implementation stage. That is, they will now dedicate their energies to circumventing
whatever policy was made. Thus, policy will suffer in one of two ways: Either some
other policy will be enacted as a side payment to the losers, a policy that is at odds with
the initial policy, or the losers will use extra-political tactics to undermine the policy
(perhaps both).
Under the Madisonian system, all parties engaged in the process have the opportunity to
influence the outcome in ways not acknowledged by the pluralist models. This allows
the greatest possibility that the solution reached will be one that is effective in terms of
social production, and it also brings certain psychic advantages in that everyone involved
develops a sense of agency in the process and therefore an sense of ownership in the
result.46 In Madisonian terms, the process takes advantage of human vanity or the union
between reason and self-love. Certainly every group will not end up fully satisfied, but
fewer groups should feel completely dissatisfied. The system, in short, should build
Capital with all involved and, at the every least, discourage them from taking action to .
undermine the results. Thus, the process is better because the dynamic among the diverse

g I‘Oups affords them opportunity to educate each other and shape one another’s

46\
I‘Iarnilton writes in Federalist # 70 “men ofien oppose a thing, merely because they

haVe had no agency in planning it, or because it may have been planned by those whom
they dislike” (702457). Hamilton goes on to warn that merely including a group in the
decision process but then disregarding their opinion altogether could do more harm than
g(30d. In sum, the process must be inclusive, and the participation must be meaningful in

0 .
r d er to avord resentment.

 

78

preferences. In sum, what Madison intended, but the pluralist model does not allow, is a
process of social learning or democratic education.
Conclusion

One of the unique features of human nature is our tendency to base decisions on
rational self-interest rather than sense and instinct. This means that people will exhibit a
greater variety of behavior leading to a greater variety of outcomes. Some of these, we
have seen, are diametrically opposed to liberal politics, either because they pit all against
all or one group against another. Yet, we have also seen that self—interest offers the
potential of cooperation that is conducive to liberal politics. The difference between self-
interest that undermines liberalism and that which supports it lies in the moral and
political dimensions of self-interest described above. Self-interest can be narrow,
exclusive, and short term, and therefore problematic, or it can be broad, mutual, and long
range, and therefore salutary. As we have seen, we can first'create liberal society and
then preserve stability in that society by encouraging the latter form of self-interest.
What remains to be seen is the best way to bring about the socially productive form of

self-interest and limit the socially detrimental forms. This is the focus of Chapter Three.

79

CHAPTER THREE
The Virtues of Liberal Property Laws
1n the discussion of self-interest, we saw the potential for a peace and the
potential for conflict, on both the individual and the social level. The argument
concluded that social stability requires the enlargement of self-interest, making it as
broad, mutual, and long-range as possible. In every case we saw that the enlargement of
self-interest required the creation of private property. Where there is a scarcity of goods,
people will have to focus all of their attention on bare preservation. Self-interest
therefore takes on its narrowest, most exclusive, and short term form. We saw that the
law of nature uses two variables to explain human behavior, one absolute and the other
relative. The absolute variable requires that people have some minimum level of
security, that there not be absolute scarcity, for where there is, one person's use of any
good deprives all others of the means of survival. It is tantamount to thefl and therefore
justifies violence. The creation of property, we Shall see, allows for generating surpluses
where nature provides only scarcity. Thus, property helps to enlarge self-interest and
drives people to behave in the manner more conducive to liberal politics.

However, property brings with it certain new challenges. While it is necessary for
peace, it is not sufficient. Property creates inequalities between people as some acquire
more goods and others less. This material inequality makes more severe the moral

PI‘Oblem resulting from our sense of unease. Those with a lower standard of living will
be(Borne envious of those with a higher standard of living. They may even come to see
the rich as having benefited at their expense. Likewise, the rich, far from immune to the

Sense of unease, may come to see the poor as a threat to their own wealth (and well

80

being). Madison reminds us that it is property that is the source of factions. In liberal
society the sense of unease will tend to narrow people's self—interest and lead them to
form groups for the sake of protecting their property, and even expanding their property,
at the expense of the rights of others. This follows the relative aspect of the Law of
Nature: As people see each other as competitors, they may act without regard for the
rights of others.

For these reasons, an understanding of self-interest requires an understanding of
private property. This chapter will explore the liberal idea of property, focusing on its
basis and its purpose. A key concern will be whether the benefits of property are always
exclusive to the owner, or whether property also creates benefits that spill over to the rest
of society without diminishing the benefits exclusive to the owner. With such an
understanding, we will be better prepared to understand how liberal property laws help to
expand self-interest and also play a key role in controlling the effects of faction.

The Basis and Purpose of Property.

Locke's treatment of property in the First Treatise focuses on its purpose. It was
given to mankind for the sake of convenience. Furthermore, it was given not for the
convenience of one or some. Locke’s analysis of Filmer’s argument along with his
interpretation of Genesis holds that property was to benefit all of mankind. Adam was to
hold “dominion in common with the rest of mankind” (I§29.4). Scattered throughout

Chapter IV are references to the communal nature of property (I§40.5-7, 19-27 and
I §43 . 10-20). The chapter concludes with perhaps the strongest statement on the matter:

Upon this ground a man’s having his stores filled in a time of scarcity, having

money in his pocket, being a vessel at sea, being able to swim, etc. may as well be

the foundation of rule and dominion, as being possessor of all the land in the
world, any of these being sufficient to enable me to save a man’s life who would

81

perish if such assistance were denied him; and any thing by this rule that may be
an occasion of working upon another’s necessity, to save his life, or any thing
dear to him, at the rate of his freedom, may be made a foundation of sovereignty

as well as property. (I§43.11-20)

Thus, the purpose of both property and ruling is to build up surplus in a way that benefits
even the neediest of people. That is, the foundation of property and sovereignty is, to
some extent, the common good. There is a temptation to conclude, as some have (Tully,
1980), that Locke intended this as an endorsement of common ownership of property—
an argument strengthened by reference to Locke’s requirement in the Second Treatise
that when labor is used as the basis of property, one must always leave “enough and as
good for others” (II§27. 1 3-14).

Yet, Locke’s possible communism is called into doubt by his clear statements in
the Second Treatise that property is to be owned individually and that ownership
necessarily “excludes the common right of other men” (II§27. 10). This suggests some
tension between the treatment of property as we move from the First Treatise to the
Second. However, this conclusion may be premature. As noted, Locke only states that
the benefits of property are to extend to all of mankind (and he never states that they
extend to mankind in equal portions). This does not mean that such a goal is best
accomplished by forcing equal ownership. Indeed, Locke implies that the task of making
property serve its purpose is too complicated to reduce to a simple rule like equal
distribution. He mentions the important role of the regime in this task, faulting absolute
monarchies for their inability to promote the “conveniences of life” (I§41.23-24). In so
doing, he invites the reader to consider whether some other regime might be better

e(Inipped to manage property and thus whether some other distribution scheme better

increases its conveniences.

82

With this in mind, the tension between the teaching of the First Treatise and the
Second Treatise need not be real. If Locke can show that it is only through individual
ownership and unequal distribution that the benefit of all is best served, and if he can
show that any other distribution scheme, particularly the equal division of land, would
actually be to the detriment of all, and would decrease not increase the conveniences of
life, then the tension between the First and Second Treatise is contrived and Locke’s
supposed communism is refuted. The way to settle this is to examine the process by
which we acquire property in the first place.

In the Second Treatise Locke explains that property is to be used “to the best
advantage of life and convenience” (2T§26). This requires that property be exclusive to
its owner. The original basis of property is that “every man has a property in his own
person” (2T§27.2-3 emphasis in original). Furthermore, “the labor of his body and the
work of his hands, we may say, are properly his.” That is, through labor, we extend our
original property beyond our bodies. By mixing labor with some good, we make that
good our property. According to Locke, “he hath mixed his labor with it, and joined to it
something that is his own, and thereby makes it his property” (5-7). The reason is that by
mixing our labor with a good, our labor “marks” the products of nature; it makes the
apple I pick distinct from the apple on the tree or the ground. This mark makes it my
private property (2T§28). The good that I mix with my labor is exclusively mine to be
used exclusively for my own benefit, as long as I abide by one rule: I must leave enough
Of that good for others, and that which I leave for others must be of the same quality as
that which I take for myself. Thus Locke concludes, “for this labor being the

unquestionable property of the laborer, no man but he can have a right to what that is

83

once joined to, at least where there is enough, and as good left in common for others”
(10-13).

Modern economics offers terminology that may be helpful in understanding the
concept. When studying the nature of a good, be it a private good or a public good, there
are three factors to which we look: First, we determine whether the use of the good can
be restricted only to the owner—that is, whether others can feasibly be excluded from
using it along with us. Second, we look to the nature of the supply of the good. If the
good is supplied such that one person’s consumption of the good does not reduce the
amount available to others, we say the good is jointly supplied. If the good is supplied in
such a way that one person’s use of the good reduces the amount available for others, we
say the good is not jointly supplied. Finally, we look to the nature of the production of the
good. If one person laboring alone can produce the good, we say the good is not jointly
produced. If the good requires the cooperation of two or more people laboring together
(but not necessarily sharing the burden equally), we say it is jointly produced. Applying
these to Locke’s argument, we see that the labor theory of value holds whenever there is
feasible exclusion, jointness of supply, and non-jointness of production.

However, Locke adds another qualification. He states that we may have property
“as much as any one can make use of to any advantage of life before it spoils; so much he
may by his labor fix a property in. Whatever is beyond this, is more than his share, and
belongs to others. Nothing was made by God for man to spoil or destroy” (2T§31.7-ll).
IInportantly, he notes that there was some period of time when both the jointness of
Supply and the spoilage qualifications could be met. This was a time of natural peace for

as long as there was a sufficient amount of basic resources there was “little room for

84

quarrels or contention about property so established [by the labor theory of value]”
(2T§31.16-18). Conversely, this suggests that it is quarrels or contention about property
that brings an end to peace.

Property, of course, means more than the exclusive use of certain goods. It also
means the exclusive use of certain amounts of land. Locke therefore goes on to explain
that man acquires property in land by the same method as goods—through labor (2T§3 2).
This is subject to the same qualifications we saw above: whenever we mix our labor with
a tract of unclaimed land, thereby removing it from the common stock, it becomes our
exclusive property provided we leave “enough and as good left for others.” As long as
land continues to be jointly supplied its goods can be feasibly excluded from others
(2T§34.9-12).47 Thus, in both the case of property in goods and property in land we see
an important normative connection between two of the economic characteristics
described above: we may claim exclusive property only as long as it remains jointly
supplied.

Locke goes on to offer examples where the labor theory has been used to acquire
property. He notes that historically in England property was acquired through labor. He
also explains that the labor basis of property was still in practice at the time of his writing
in parts of Spain. However, he notes that in contemporary England (and “other
countries”) although there was still some common land, it could not be acquired by labor
but required the consent of fellow citizens. This is because the conditions could not be
met, for “the remainder, afier such enclosure, would not be as good to the rest of the

\

47 . . .
In the context of landed property, Locke notes that rt rs to be used “for their benefit”
and not simply for mere convenience, but for “the greatest conveniences of life they were

capable to draw from it” (2T§34).

85

commoners as the whole was, when they could all make use of the whole” (2T§34.8-10).
Still, the crucial point seems to be that these conditions could be met for some time, and
they only cease to be met with the invention of money (2T§36.33-40). This suggests that
it is not an increase in population that made it impossible to leave enough and as good for
others. Indeed, he actually recommends that it is desirable to increase population so that
there are more people to work the land, explaining that “numbers of men are to be
preferred to largeness of dominions” (2T§42.21-22).

Rather than growth in population, it is growth in appetite that leads to scarcity.
This is clear beginning with Locke’s comment, almost in passing, noting the penury of
man’s natural condition (2T§32. 12). The comment reveals some tension in the labor
theory: If it is possible to satisfy the requirement that goods be jointly supplied, it would
seem that there was not a problem with scarcity. Yet if scarcity were not a problem it
would seem strange to describe our condition as poverty. The solution to the tension lies
in understanding not the quantity of the goods available, but rather the quality of goods
available. We lived in poverty, not because of a scarcity of goods in the strict sense, but
because of the fact that the types of goods that were in sufficient supply—the kinds of
goods that we could make our property based on the labor theory—were very basic:
acorns to eat, water to drink, and leaves and skins to wear (2T§42). These goods remain
j ointly supplied because of their relative abundance and the natural limit to our
consumption. One can only eat so many acorns. However, as we saw in the discussion
of the First Treatise, people desire not merely preservation, and not merely sustenance,
but comfort. With the expansion of property to land, and the note that landed property

eXi sts specifically for our comfortable preservation, we soon develop goods of higher

86

quality. Yet, as land comes to be used to produce the goods of comfort, it ceases to be
jointly supplied. This gives rise to the need for consent to maintain ownership. The

natural progression is described succinctly by Locke:

But as families increased and industry enlarged their stocks, their possessions
enlarged with the need of them; but yet it was commonly without any fixed
property in the ground they made use of till they incorporated, settled themselves
together, and built cities, and then, by consent, they came in time to set out the
bounds of their distinct territories and agree on limits between them and their
neighbors, and by laws within themselves settled the properties of those of the

same society (2T§38. 13-19).

The description also calls to our attention an important point about the condition of
nature: There was enough basic materials and goods for a very basic life, but human
appetite caused people to desire more and more. 48 However, there was scarcity of the
goods necessary for this. Furthermore, those who attempted to produce them would
invite the jealousy of those without them which would lead to quarrels and initiate the
downward spiral to war.

Locke notes that land is not initially scarce, but becomes scarce as it is used to
produce luxury goods (2T§45.6-8). It is tempting to think that this is owing to the greater
need for raw materials (i.e., it takes more land to produce enough grain for bread to
sustain life comfortably than it took to produce enough acorns to sustain life simply). But
this is not the case. We need greater amounts of land to produce these goods not for raw
materials simply, but more so to give the producers an incentive to overproduce.
Overproduction is necessary so that there is a supply of goods adequate to meet the needs

of landowners and non-owners alike. But why not simply divide the land up equally

 

X

48Compare this passage with Glaucon’s complaint in Plato’s Republic (3 72c-d) that
Socrates’ description of the original city is fit only for sows and his insistence on a city

With “relishes”.

87

among all people, allowing each to make use of it as he or she sees fit? The problem is
that due to an unequal distribution of knowledge, talents, and other factors, not everyone
will be able to produce these goods, yet all will desire them. Therefore, those who
received land under an equal division scheme would not be using it to its fiillest potential.
They would be wasting the land and depriving others of the goods that could otherwise
be produced on the land. Thus, the only way to produce an adequate supply is to give the
land to those Locke calls the “rational and industrious”. They must possess enough land
that they can produce enough goods for their own comfortable preservation and enough
goods to sell off to make a profit that they can use for other items of luxury. The
intention is to create conditions where their pursuit of luxury raises their own standard of
living, but also pulls up the general standard of living. Thus, the Lockean economy is not
simply materialist; it also is based on a moral understanding of human nature or what
motivates desirable behavior and what is necessary for accomplishing desired ends.

The scarcity of land explains why allowing goods to spoil is equivalent to theft. If
one allows bread to go stale that another could have eaten, but was unable to produce for
herself, either because she lacks the ability or the resources, it proves that one has not left
enough and as good for others to make use of. The first person has deprived the second
of resources she could have put to better use for her own comfort. In fact, even if one
leaves plenty of acorns behind for others to eat, they are not as good as the bread one is
Wasting. Reflecting on the discussion of self-preservation, this reveals the danger of the
Situation: If one begins to produce goods of comfort, but then allows them to spoil, these
are goods another could have made use of for her own preservation. Likewise, the land

that was dedicated to wasteful production could have been used by somebody more

88

industrious to produce those goods for herself and others. Since this deprives her of
goods that would have been usefirl to her preservation, literally, the preservation of the
land owner comes into competition with that of the non-owner—which, we have already
seen means first that one who is without land no longer has to concern herself with the
good of the landed. Then, when the landowner allows usefirl goods to spoil, be
essentially steals from those without land. In Locke’s words, he “invade[s] his
neighbor’s share” (2T§37 .39), which escalates the competition. Those without land may
now punish the wasteful landowner for violating the law of nature, which, as we have
seen, would likely trigger a chain reaction bringing about war. The spoilage provision
suggests that there is not, and can not be “enough and as good left for others” which
invalidates the terms of the labor theory of value. It implies that there is scarcity in
nature (perhaps not of all goods, but definitely of the most desired goods).49 Since one
person’s consumption of these goods will reduce the supply available to others, the
desirable goods are not jointly supplied and consequently can not meet the qualifications
for the labor theory of value. This raises the need for a new justification for property.
We move from the labor theory to consent: Literally, those without landed property agree
to respect the ownership rights of those people who possess the land. Still, if the fact of
the matter is that the goods most desirable are in scarce supply, why would anyone
consent to property, thereby giving an advantage to some at the expense of others?

The solution lies in an understanding of the productive capacity of the earth.
Property gives us the opportunity to overcome the scarce supply of comfort goods.
Locke’s discussion of the productive capability of land is revealing. We learn that “he

\

49 Compare also 2T§38 and 2T§46. l4-l 7.

89

who appropriates land to himself by his labor does not lessen, but increases the common
stock of material” and furthermore that “the provisions serving to the support of human
life, produced by one acre of enclosed and cultivated land, are (to speak much within
compass) ten times more, than those, which are yielded by an acre of land, of an equal
richness, lying waste in common.” Thus, cultivated land is ten times more productive—
which he immediately expands to one hundred times (2T§37.11-12, 22-29 see also
§40.10-15) and then to one thousand times (§43.7). Properly harnessed, land can be used
to support greater numbers of people. More important: It can also be used to provide
them with higher degrees of comfort. The key is providing landowners with an incentive
to produce surpluses and non-owners an incentive to consent to the legitimacy of private
property.

Both incentives come with the creation of money. Locke explains why money
makes possible the overproduction of certain goods (2T§48). In the pristine condition of
nature, there is sufficient supply of acorns, water, leaves and skins for all to have some.
Some people were not satisfied with these goods so they endeavored to create bread,
wine, and clothing (these are people with greater appetite). The problem is that not
everyone can produce these goods in nature. However, those who can produce luxury
goods could make more than they need personally, provided the right incentives exist.

To give them an incentive two things are necessary, the creation of money and the
granting of large tracts of land to the industrious, for they possess the proper internal
motive: a greater appetite for comfort. This will lead them to hoard up as much money as
possible, which they will spend on greater luxury items and also save as insurance against

future misfortune. The greed of the landed will also benefit the non-land owner. Unlike

90

the goods prior to the creation of money, which could generally be produced alone, most
goods in the monetary economy are jointly produced. Locke offers an example of how
even the simple loaf of bread might require the cooperation of several different people.
He even plays it out to an extreme point demonstrating the effects of the bread used in
international commerce (2T§43). In even the simple case, the wealthy will have to
purchase labor from those without land. This provides the non-landed with some
wealth—enough to purchase bread, wine, and clothing and thus rise above his former
economy of acorns, water, and skins.

The greatest benefit is the existence of the market economy itself, for, properly
designed, it attaches the well being of the rich to the welfare of the poor in two ways.
First, they are connected directly as the wealthy will be expected to tolerate some degree
of taxation, and the tax dollars are used to pay for public goods that improve their own
lives, but also improve the lives of the poor. This would likely include safety net
programs that insure a minimum standard of living to all.50 Second, as the rich create
new goods and services for themselves, a substantial amount of the benefits become
available to the poor because the cost of most goods drops with each successive wave of
innovation. This logic is the source of Locke’s famous statement that a day laborer in

England is better clad, fed, and housed than a prince of the Indians. That is, even though

 

50 Thus, some limited concept of the welfare state is perfectly compatible with
Lockeanism. The poor give up certain freedoms they had in the state of nature and
acknowledge the legitimacy of private property and the liberal state. In exchange they
have every reason to expect some minimum standard of living. Of course this also means
that it is important that the quality of life afforded by the welfare state not be greater than
the quality of life afforded by work. Otherwise the system would encounter what
economists call work disincentives. For a critique that the American welfare state under
the Great Society suffered from such work disincentives, see Glazer, 1988 and Murray,
1994.

91

he lives far below the standard of living of the rich in his own society, the day laborer has
access to goods that are not available to even the wealthiest person in a society without
landed property.5 I This explains why those without land consent to the property rights of
the landed: They accept that it is only through such an arrangement that the most
desirable goods will be produced and they realize that even if the greatest comforts are
not available to them, the products that are available are far superior to those that exist
when land is jointly supplied and ownership is based on labor.52

There is also a moral justification for this arrangement. Property serves to
maximize our horizon of security, which means it is our best hope for bringing about
mutual assistance, goodwill, and peace. It allows the wealthy to let their guard down and
act with a broader idea of self-interest—broad enough that it benefits those less well off.
This is best seen in the changing nature of property. With the invention of money, the
economy becomes more sophisticated and the benefits derived from any good, be it for
use or for exchange, cease to be fully excludable.53 In economic terms, there are direct
benefits that continue to accrue only to the owner, but there are also indirect benefits that
spill over to non-owners. The spillover benefits can take many forms including public

goods paid for through philanthropy such as parks, museums, and recreation centers.

 

5’ Consider that most poor in advanced capitalist societies have heated homes,
automobiles, and television sets compared to the poor of non-capitalist societies.

52 There may be a temptation to call this “trickle down” economics. This is at best half
correct. The general logic is correct, but modern partisans of “trickle down” economics
assume that these goals are best met via the unbridled market. This, as we shall see, is
not exactly what Locke has in mind.

53 Note that the distinction between use value and exchange value has existed since at
least Aristotle, and is a particularly important issue for Marx. However, the present
analysis does not depend on the distinction. I assert that goods used for both use and
exchange have both direct and indirect benefits, the vast majority of which accrue to the
owner, but some part of which spillover to benefit others.

92

Other important spillover benefits exist on a smaller scale, such as the decision to support
a neighborhood playground. Even more important are non-material benefits that, in part,
spill over from the leisure afforded by the material wealth of landowners. This is related
to the notion of “social capital”.54 Finally, the most important extemality generated by
private property is its opposite: The public forum. That is, with a diversity of kinds and
amounts of property will come a diversity of ideas and opinions. The exchange of these
ideas and the sharing of knowledge such ideas generate is valuable to rich and poor alike.
The key to all extemalities is, first, not allowing the wealthy to recapture them, and
second, not allowing the wealthy to isolate themselves in such a way that the spillover
benefits only circulate to other wealthy landowners. The reason is best illustrated by
example.

Consider a neighborhood school that draws from both wealthy and non-affluent
families, living in close proximity to one another. The most obvious benefit is that the
wealthy provide the greatest amount of tax dollars to operate the school. Second, the
wealthy may decide to engage in philanthropy at the school, donating a large sum of
money for a library or a computer laboratory. Even if their primary motive is to have
these goods available to their own children, since they are public goods, they can not be
excluded from the children of the non-affluent who also attend the school. Next, the
wealthy may invest great amounts of social capital in the school by leading a parent
organization that aggressively seeks teachers of high quality and a curriculum, both

academic and social, that enriches all students. Finally, all children will benefit from the

 

54 See especially Putnam, 2000, 192-94.

93

diversity of ideas that circulate in the school owing to the diversity of property in the
surrounding community.

This suggests something about the relationship between rich and poor in a
properly ordered political economy. Even with the benefits afforded by the sophisticated
economy, there will be a clear difference between those who own land and those who do
not in terms of quality of life. The issue is against whom should those without land
compare themselves? Certainly they do not benefit as much as the landholders, but the
proper standard of comparison is not the landholders. They should compare themselves
to their own condition were there no property—a condition in which they would be far
worse off. That is, those without land are better off in a world where landed property
exists than they would be in a world where it does not. They do not gain access to all of
the luxury items that are made possible by landed property, but they do gain access to
enough of them. Of course, as the luxury goods available to the landed rise, those
without land expect to improve their conditions as well—even if only incrementally. As
long as this remains true, they have a rational basis for consenting to the institution of
landed property. Consequently, if there comes a point where they are shut off from these
goods—say by the creation of a political system where the benefits of private property
become perfectly excludable—then those without land would have a rational basis to
revoke their consent, for such an arrangement would put them in a condition worse than
the state of nature and according to Locke, “no man would consent to being worse off’

(2T§131).55

 

55 The assumption is that that civil society entails certain costs, such as limiting one’s
freedom by agreeing to respect private property, and certain benefits, such as access to
the extemalities generated by others’ property. In the state of nature, the benefits would
not be generated, but the costs would not be born. Therefore if the benefits are somehow

94

Still, there is a potential problem. Regardless of how broad our horizon of
security grows, we will always be somewhat insecure. Doubts about the future will lead
us to seek economic arrangements that maximize our benefits. This effects rich and poor
alike. At the very least, the rich will have an incentive to minimize wages and maximize
prices whereas the poor will have the opposite incentives. More interesting, the rich will
have an incentive to maximize the amount of production that they keep and, if they
become aware of the spillover benefits and suspect that they could put them to better use,
they will desire to cut them off.56 Likewise, the poor will have an incentive to maximize
spillovers. Of course, if people are moved into sharpened self-interest, the rich will seek
to maximize their utility by allowing the least possibile extemalities—i.e. they will seek
policies that allow them to insulate their wealth. As for the other part of the equation,
they will also seek to minimize the expenditures on public gods—even reneging on prior
commitments by privatizing traditional public goods (thereby cutting off access to the
poor at the same time they dam the flow of spillover benefits).57 In sum, if self-interest is

sharpened, maximizing behavior will become more blatant, pitting rich and poor in a

 

shut off, it is more preferable to be in nature (no costs, no benefits) than to be in the
perverse version of civil society where one is expected to bear the costs but not enjoy the
benefits.

56 In economic terms, they will engage in rent seeking behavior.

57 Applying this to the school example used above, the rich may find a way to segregate
themselves from the poor. Then they will use their wealth exclusively to the
improvement of their own schools, meaning the poor lose access to the excellent
facilities, the computer labs, and the aggressive parent organization. This segregation can
occur through literally moving, or through a system that allows the wealthy to opt out of
the public system and use a private system. In the extreme case, this would lead to a rift
in the society, dividing between the “haves” and “have nots”, which would cast doubt on
the legitimacy of the regime. For compelling arguments that this has become the case in
the United States, see Harrington, 1997 and Piven and Cloward, 1997.

95

game of chicken.58 Managing the liberal state therefore presents the challenge of
maintaining a delicate balance among competing interests. This is a problem Madison
explains in Federalist # 10.

Private Property and Liberal Stability.

We saw that Madison's cure for the problem of factions has two components, one
procedural and the other moral. The moral component of the cure requires that people be
of a certain temperament. They should have a diversity of opinions, but still, not disagree
so much that opinions are widely distributed and irreconcilable. Also, they should be
only loosely attached to their opinions and willing to accept other ideas that differ from
their own, as long as they do not differ too much. Finally, while there should be diversity
regarding particular ideas and opinions, liberal citizens should also be strongly attached
to certain general principles. Thus, there are numerous forces at work in the soul of
liberal citizens. At the crossroads of these forces is a common source, private property.

Private property can serve as a decentralizing force. This is because of the
relationship that exists between property and our opinions—more so the type of property
than the amount.59 In Madison’s words:

From the protection of different and unequal faculties of acquiring property, the

possession of different degrees and kinds of property immediately results; and

from the influence of these on the sentiments and views of the respective

proprietors, ensures a division of the society into different parties and interests.
(10:55)

 

’8 This behavior could be modeled by asking how much are the rich willing to tolerate in
the way of spillovers before seeking to shut all off and how little are the poor willing to
accept before rebelling.

’9 Some historians, following Beard (1986), attempt to draw a parallel between Madison
and Marx given Madison’s emphasis on property. To do so is to neglect the greater
importance of a diversity of kinds of property.

96

For example, those with property rooted in the land will tend to have agricultural
interests; those with property rooted in equipment will have industrial interests, and those
with property rooted in trade will have mercantile interests. Likewise, the large farmer
and the subsistence farmer—even the day laborer who owns no land but works for wages
on another’s farm—will all have more in common with each other than the wealthy
farmer would have in common with the wealthy industrialist. In this regard a diversity of
property will produce a diversity of interests. For this reason, we must be not only a
republic, but a commercial republic for it is capitalism that “multiplies the means of
gratification” by uniting the market with human appetite and allowing for innovation
(12:70-71).60 As we saw in the discussion of Locke, human appetite will give rise to new
products and the market will provide an arena in which they are brought to the fore. As
the market becomes more sophisticated, there will arise greater diversity of types of
property, reflecting the new elements of the economy. There will be a related
diversification of opinion. This fits with the natural desire, given us by vanity, to
distinguish ourselves from others. The desire for distinction prompts us to engage in
different activities, pursue different vocations, acquire different types and amounts of

property, and therefore creates a diversity of opinion.“

 

60 See also Federalist #5 6, which speaks of the effects of time on the political economy.
We will become more homogeneous at the national level, but more diverse at the local
level. The point is that there will cease to be particular regions associated with only a
single industry such as agriculture, but rather all regions will have some amount of
agriculture, some industry, and some business (562368).

6 In Federalist #2 John Jay calls attention to the “variety of soils and productions” in
America but also the “one united people”. He seems to suggest that diversity does not
spring up naturally from the human soul, but rather comes from the diversity of industries
or types of property (2:10-11).

97

Property can also serve as a centralizing force. The market may value diversity,
but it does not value radical change.62 Products must be appealing to others, therefore
innovation can not carry us too far from the center. The margins are too risky in market
terms. Likewise, we avoid opinions that would be regarded as marginal. As we noted,
self-love leads us to want others to agree with us. For this reason, we are psychologically
discouraged from taking up positions that stray too far from conventional opinion. That
is, we are unlikely to embrace ideas that will be unpopular with others. This makes it less
likely that we will speak openly and publicly about unjust desires. Assumedly we fear
that others would not confirm such views, causing injury to our vanity. It is
commonplace to speak today of there being a marketplace of ideas.63 This catches the
sentiment rather well: Just as others will not purchase products that are unpopular or too
unconventional, the same is true for unpopular opinions: others will not adopt them.
Thus, our desire for the affirmation of others will naturally lead us to locate our opinions
toward the center.

Moreover, private property influences the intensity with which we hold our
opinions, encouraging us to hold certain principles firmly and others less so. The
principles we hold with great strength include the notion of human rights and liberty, but

the most obvious attachment is to the concept of private property itself. Still, even the

 

62 Consider the role of innovation in industry, particularly the auto industry. Auto shows
often feature “concept cars” but these cars are never immediately marketed. Instead,
incremental changes are made every model year based on the concept cars. This is
because the incremental changes strike the appropriate balance between the desire for
innovation and the fear of radical change.

(’3 A strong proponent of this concept is Justice Oliver Wendell Holmes who wrote “the
ultimate good desired is better reached by free trade in ideas. . . . [and] the best
[measure] of truth is the power of the thought to get itself accepted in the competition of
the market.” See his dissenting opinion in Abrams v. United States 250 US. 616 (1919),
at 621.

98

attachment to property is not absolute, for capitalism also has a tendency to dull our
interests. It offers a multitude of choices which means a wide variety of issues must
compete for our attention. It is more likely to hold a position strongly if it is the only
position of concern. Since capitalism leads to a complex society with a great variety of
issues, we are less likely to focus on a single issue. With a multitude of issues competing
for our attention, we must divide our time and therefore effort among the issues, meaning
no single issue can be dominant. In this regard, just as our appetites shape the products
of the market, those goods shape our appetites in return. As we chase one commodity
after another in an ongoing quest for comfort, our other passions—such as the passions
that would pose the greatest danger to liberty—grow duller. Those who are attached too
strongly to a single issue are therefore seen as crusaders, zealots, even fanatics. For those
who do hold strong passions, capitalism offers an arena of action and expression that
channels ambition. It provides a socially beneficial outlet to our appetites—especially

the appetites of the ambitious. This, too, is more than a material argument. There is also
a moral lesson that stems from the vanity of democratic temperament: We realize that in
order to get the confirmation of others, we can not be too rigid in our opinions. We must
hold them tepidly, leaving room to adjust them to meet the demands of others. We end up
holding fewer unjust interests, and to the extent that we do hold such interests, we do not
hold them so strongly that we are willing to expend the energy to execute any unjust plan.
To relate this back to Locke, by promoting the ownership of private property we push
back people’s horizon of security. This allows them to let down their guard and be more

flexible in their positions. As long as the core principle of private property is secure,

99

people will be more liberal with regard to other issues. Conversely, if the core principle
of private property is attacked, they will become more rigid in their views.

In sum, the commercial republic should promote a diversity of interests, but these
interests should be clustered in close proximity to one another, with each group only
moderately attached to its preferred position.64 Put in more formal terms, capitalism
helps to prevent extreme positions; it pulls most citizens toward the center and it
moderates the intensity of our attachment to our positions. It is this moral dynamic, kept
in careful balance, that allows the procedural aspect of Madison’s argument to function.
It also helps to bring about the beneficial aspects of self-interest that Locke

recommended.

 

6" The tendency for opinions to drift toward the center is explained in formal terms by
Duncan Black’s Median Voter Theorem (1958). The same phenomenon is explained
philosophically by Alexis de Tocqueville (1969), who devoted particular attention to the
effects of equality on the content of opinions. This stems epistemologically from the
argument that “a middling standard has been established in America for all human
knowledge. All minds come near to it, some by raising and some by lowering their
standards” (56). From this middling effect, the majority comes to hold considerable
power over thought (254-56) and in effect, morals (561-65, 594-600).

I ()0

CHAPTER FOUR
The Role of Political Leadership in Liberal Society

Little has been said so far about leadership. This is, at first blush, not an obvious
omission. Leadership is a suspicious topic in the liberal context, and the philosophers of
liberalism seem oddly uninterested in it. Locke pays far less attention to his executive
that Hobbes did to his sovereign. Madison's note that "enlightened statesmen will not
always be at the helm" is often quoted as evidence that the liberal regime is too
democratic to tolerate or require leaders in the traditional sense. However, the analysis of
self-interest and private property reveals just how delicate a balance must be struck to
keep human nature conducive to liberal society. The natural tendency is for people to
allow the sense of unease to narrow their self-interest, causing them to behave in ways
dangerous for liberal stability. However, if we continue our examination of Locke and
Madison, focusing not the substance of their teachings, but rather the way their lessons
are taught, we will see that they do offer an important lesson in leadership that anyone
concerned with resisting liberalism's tendency toward fracture must learn.

The Rhetorical Strategy in Locke's Doctrine of Property

Interestingly, Locke never withdraws the labor theory of property. Indeed, he
seems to prefer that most readers come away agreeing with it, since he is so subtle in the
transition from one theory to the next. Even today our discourse is more attuned to the
labor theory of property than consent: The Protestant Ethic tells us to praise hard work.
We justify our possessions by claiming that we worked for them. Also, we speak as if we
have left enough and as good for others: When faced with a beggar we may scold that he

should “go get his own” or we may remind him that there are plenty of opportunities for

101

a person who is willing to work. Indeed, the very concept of the American Dream
presupposes there is enough for others. Even the spoilage requirement remains firmly
entrenched in our rhetoric as any child knows who is scolded by a parent for not eating
certain foods: The exhortation to “clean your plate because there are children starving in
Africa” implies that our wastefulness deprives them of food they could have eaten. It is
impressive that an incomplete argument has proven so enduring.

Yet there is a reason the argument has endured. The labor theory of value appeals
to our sense of justice. It is a moral argument—people deserve what they have worked
for. The argument is designed to get those without land to accept property in a way they
would not if they were taught that it is based solely on consent. The teaching of consent
reveals the degree to which property rests not on justice, but chance and even force (the
right of the first occupant). It is an argument less from the standpoint of justice than the
standpoint of necessity: We need property to create an incentive to produce surpluses so
that the greatest comfort of the greatest number is served; it creates conditions most
conducive to peace in a way that equal distribution of property would not.65 The labor
theory of value makes being poor a bitter pill to swallow, but less so than the alternative.
The poor are therefore less likely to demand redistribution and policies that will upset
production if they accept the labor theory of value. Put another way, if property were
understood to be so closely related to chance, like winning a game of dice, then it would
be easier for the poor to demand another roll of the dice (an image that makes clear the

double meaning of the term fortune). In sum, even though consent is the final basis for

 

65 This is why Locke does not consider the idea that as goods cease to be jointly supplied,
they should also completely cease to be excludable—an idea that, in the extreme, would
lead to communism.

102

property, it is not the public argument used to justify it because that would weaken the
institution.66

Nevertheless, this rhetorical strategy creates political challenges. It is not enough
to create private property and establish a state to protect it. Questions arise immediately
over the proper role of the state with regard to the economy. The desire to maximize
personal utility will lead both rich and poor to seek assistance from the government. The
poor will seek regulations on the economy that increase the spillovers they receive from
other’s wealth. The rich will attempt to remove regulations and even seek subsidies of
their own. The state must use its power to preserve balance among competing interests.
An even greater challenge has to do with the variety of human nature and the effects of
time. Let us grant that the initial distribution of property roughly corresponded to
people’s ability to put the land to productive use. Therefore distribution of land followed
the natural distribution of people’s talents, knowledge, and ambition such that those who
were most rational and industrious possessed the greatest amount of land. Even if this
was possible, there is reason to doubt that such parity between character and ownership
would carry over to the next generation. Simply because a parent is rational and
industrious, a child may turn out to be ignorant or lazy. Likewise, if a person who
receives no land in the initial distribution had children who were rational and industrious,
it might make sense to redistribute the property to preserve parity between ability and

estate. Yet, we have already seen that Locke intended children to inherit their parent’s

 

(’6 It is worth noting that Locke, in a sense, does the same thing Socrates was charged

with doing by his “first accusers” in that he makes the weaker speech the stronger.
However, the connotation in the case of Socrates is that his rhetoric was intended for
unjust ends whereas Locke’s rhetoric is intended to serve just ends. See Plato’s Apology
18c and also Aristophanes’ Clouds, 112-118. For a useful discussion see footnote 9 of
the West edition of the Apology.

103

land, and we have seen that any direct attempt to redistribute wealth will sharpen self-
interest and invite resistance. It would appear that there are two alternatives possible: use
draconian methods that can not be easily resisted, or use subtle methods that can not be
easily detected. Given the principles of liberalism, it would seem that the second option,
while imperfect, is to be preferred. Yet this means there is need for a political leader who
is perceptive enough to recognize when the correlation between ability and estate has
gone awry, and also clever enough to devise a subtle remedy to the problem.

Locke appears to be aware of these challenges. He acknowledges that there is a
role for the state in regulating the economy by qualifying his paean to the improvement
of land, noting that the “great art of government” is not simply the improving of land, but
the “right improving” of land (2T§42.23-24). This means government must arrange
things so that there is a surplus, but it must also regulate the economy so that there is
adequate access to the benefits of property—particularly for those without land. Locke
notes that the consensual basis of property includes an agreement to some degree of
regulation. He says that once land became scarce, communities “regulated the properties
of the private men of their society, and so, by compact and agreement, settled the
property which labor and industry began.” (2T§45). He makes the point even more
strongly later arguing that:

For it would be a direct contradiction for any one to enter into society with others

for the securing and regulating of property, and yet to suppose his land, whose

property is to be regulated by the laws of the society, should be exempt fi'om the
jurisdiction of that government to which he himself, and the property of the land,
is a subject. (2T§120.6-11).

Yet he would not endorse a market where the regulations are so burdensome or restrictive

as to create work disincentives among rich or poor (poor because the benefits of welfare

104

outweigh the benefits of work and the rich because the benefits of leisure outweigh those
of work). The question is what government should do to encourage the “best advantage
of life”. This is not to say that the regulatory hand will be heavy (or even visible—
Smith), but it will exist nonetheless. The regime will be capitalistic, but not laissez faire.
The danger of the regulatory hand being too strong is that it will be perceived as a direct
threat on property. This shrinks the horizon of security and therefore narrows self-
interest. Literally, people will come to fear that the regulatory burdens will deprive them
of the means needed for preservation.67

This leads to a problem: How does the government regulate property when the
vast majority of citizens are taught the labor theory of value? Both the rich and the poor
believe in the labor theory of property. Therefore any attempt to regulate in too direct or
too heavy-handed a manner will invite resistance from the citizens. Even a perceived
attack on property will sharpen the self-interest of the rich and cause them to behave in a
manner contrary to the public interest. They will judge on their own behalf what
constitutes an intrusion into property rights—meaning they will likely be quick to see the
violation and hasty and extreme in their reaction. On the other hand, failure to manage
property can lead to insular behavior by landowners. They will shut off the extemalities
to those in need, making their consent to property a bad deal. This will sharpen the self-
interest of the poor causing them to behave in “bare preservationist” mode. They will
resist civil society through crime, withdrawal, skepticism, and alienation. In short, poor

management of property will shorten the distance between goodwill and enmity, even in

 

“7 See Tarcov, 1981.

105

civil society. Each class will begin to act on force, which is the definition of the state of
war.68

This raises yet another level of the problem: the poor will become targets of
politicians who capitalize on class animosity to gain power through demagoguery—and
such politicians also fail to manage property, but do manage to raise expectations and
fiJBl the fire of the underclass. The rich will become targets of politicians who make
equally empty promises of freeing the market and “getting government off their backs” (a
promise that is dangerous if broken and even more dangerous if kept). In short, what is
needed is political leadership (statesmanship) that educates people with subtlety and
manages property with caution.

Locke says “the increase of lands and the right improving of them is the great art
of government. And that prince who shall be so wise and godlike as by established laws
of liberty to secure protections and encouragement to the honest industry of mankind
against the oppression of power and narrowness of party will quickly be too hard for his
neighbors” (2T§42.22-28). He then promises to say more on this “bye the bye.” Yet it is
not until the chapter on prerogative that we learn more about the qualities of the Lockean
executive. Interestingly, this chapter is the only other place in all of Locke’s writing that
he refers to the executive as “wise and godlike” (§166). I-Iis point may be that, despite
earlier teaching that chastises arbitrary rule, the best princes are able to make greater use

of prerogative (ruling without or even contrary to the law. See §165.10) without arousing

the suspicion or resentment of the people. This is because his actions are seen to be in

 

6” Recall that the state of war can occur within civil society, for Locke writes that “force
without right upon a man’s person makes a state of war, both where there is, and is not, a
common judge” (2T 1922-24).

106

the public good. Perhaps one area that prerogative is most necessary and beneficial is
the area of property regulation. As long as it is done with subtlety and results in
enlarging the public good—that is, the actions lead to the “increase of lands and the right
improving of them” (2T§42.23-24).69

We seem to have arrived at our goal—the answer to Banfield’s mystery and the
understanding necessary to ground regime theory in liberalism. In the case of Banfield, it
is our relative security—linked closely to property—that most directly influences our
sense of time. Where security is too weak, our self-interest is narrow and we take actions
to serve more immediate needs. When security is stronger, self-interest is broader and we
can look beyond immediate needs to the future. In the case of regime theory, it is our
relative security, again with reference to property, that best explains our propensity to
form and sustain groups.

The examination of Locke’s political writings has demonstrated the closer
proximity of peace and war, goodwill and enmity. We have learned that self-interest can
be broad and long term—and therefore offer the promise of peace, or it can be narrow
and immediate catalyzing the problem of war. Additionally, we see that disputes over
property greatly effect the narrowness or breadth of self-interest. Finally, we see that
government plays an important, but complex role in managing property so as to keep
self-interest aimed at peace. Therefore, we need a liberal politics that will preserve this

liberal formula for peace. We need a politics that is sensitive to the relationship between

 

69 Which means that this arrangement would bring harmony to the statement in the First
Treatise (1T§43) that property is intended to promote the common good and also the
lesson of the Second Treatise that property can not be equally distributed. It would,
consequently cast doubt on interpretations stemming from the “possessive individualism”
school, particularly that of Tully (1980).

107

property and self-interest—a politics that is aware of the important role of government
and attuned to the need for subtlety. It is this kind of politics that the American founders
in large part sought to design, and this kind of politics whose blueprint we find in the
Federalist Papers.

The need to manage private property calls to mind the politics of class, but also
interest group politics more generally. Keeping the horizon of security pushed to a
maximum means that the wise and godlike prince must arrange society so that no single
group can dominate others. Failing this, the moral calculus will shift in an adverse
direction, allowing groups, and finally individuals, to regress toward narrow self-interest.
The potential offered by self-interest will once again decay into the problem. Therefore,
as important as understanding self—interest at the individual level is, the discussion can
not end there. It gives us only a partial understanding of the liberal political economy. A
fuller understanding requires that we turn to the study of how interest groups, composed
of rationally self-interested people, compete for power and influence policy outcomes.
This is a topic to which James Madison devoted considerable energy.

Leadership and Democratic Education

According to Madison, an important role of the democratic leader is to help
“refine and enlarge the public views” in a regime (10:59). To accomplish this leaders
must maintain two conditions critical for a robust public sphere. First, diverse interests
must be brought together into a common public forum, and second, the forum must be
capable of fostering a democratic temperament. Leaders may need to make an effort to
include voices that are often underrepresented. Moreover, leaders may have to take

action to ensure issues are framed so as to keep self-interest broad. But the most

108

important characteristic of leadership is far more subtle. As Madison notes, refining and
enlarging citizens’ views is not accomplished through direct action, but rather through
“indirect and remote considerations” (10:57).

First, leaders must prevent an institutional arrangement that allows certain
interests to exit into their own separate forum. If leaders fail on this account, they allow
the public sphere to be fractured into several smaller spheres. This forsakes diversity of
opinion. Figure 8 illustrates the problem. Interests A-K exist in close proximity to one
another. They may be connected socially and economically, but they are divided
politically into three sub-units (denoted by the solid lines). Rather than a large number of
diverse interests, each sector is composed of only three fairly similar interests. The
policy discourse in each sector will take on a different tone and include a different
agenda. Solutions available to one sector will not be available to the other two—even if
all three face similar challenges. We can expect that effective outcomes will be unlikely
as a result of the fractured public sphere.

Second, leaders must prevent a discursive tone that places interests in a defensive
posture with regard to one another. By extending the sphere, representatives of different
groups have the opportunity to engage one another, discover commonalties, and therefore
mutual interests. This serves as the basis of cooperation, which we have seen is more
likely when self-interest is dulled down and people are less strongly attached to their
ideal preferences. Both Locke and Madison stress the delicacy of the matter. As we saw
in Chapter Two, the condition of goodwill and cooperation is not far from that of enmity
and conflict, and it takes very little threat to move people from one to the other. Madison

echoes this sentiment in his statement that “so strong is this propensity of mankind to fall

109

 

 

 

 

 

Figure 8: The Fractured Public Sphere.

110

 

into mutual animosities, that where no substantial occasion presents itself, the most
frivolous and fanciful distinctions have been sufficient to kindle their unfiiendly passions
and excite their most violent conflicts” (10:56). As we saw in the discussion of Locke,
such “unfriendly passions” are kindled when people feel that their security is being
attacked—especially with respect to property.

Property turns out to be the key for maintaining the conditions needed for a
healthy public sphere. We have already seen that Madison draws close connection
between property and the formation of interests. As it turns out, there is also a
connection between property and the management of interests. Madison writes, “the
diversity in the faculties of men, from which the rights of private property originate, is
not less an insuperable obstacle to a uniformity of interests. The protection of these
faculties is the first object of government” (10:55). That is, we best safeguard a diversity
of interests by first protecting the diversity of property.70 Second, Madison states that
“the regulation of these various and interfering interests forms the principle task of
modern legislation, and involves the spirit of party and faction in the necessary and
ordinary operations of the government” (10:56). If the first object of government is to
protect the diversity of faculties that makes property (and therefore diversity of interests)
possible, and the principle task of government is to regulate the diversity of interests, it

seems that we accomplish the principle task of government by attending to the first object

 

70 This reveals more fiilly the difference between Madison and Marx alluded to earlier
(see note 11). While both are concerned with property, Marx’s solution is to force equal
distribution of property, assuming that it will cure alienation and liberate all of mankind
(Marx, 1978, 484-91). Since diversity of property is the source of diversity of interests
and therefore faction, the attempt to equalize property is equivalent to the attempt to
remove the cause of faction. Madison, as we have seen, wholly rejects this strategy.

111

of government. In sum, regulating property is the way to exercise leadership in a remote
and indirect manner. Leaders do not regulate the opinions themselves, but they regulate
the source of those opinions—property.

But even regulation of property must follow tactics that are indirect and remote.
As we saw in Locke, people can be very defensive when it'comes to property. By
regulating property too closely and too obviously, people will react negatively. We will
likely get less diversity of opinion and greater attachment to whatever opinions do exist.
Simply put, the centralizing effect of property will be too strong. By not regulating
property closely enough, we will get too many extreme positions and all positions will be
held too weakly—we will suffer from relativism, which is no more conducive to
meaningful debate than its opposite. In short, the decentralizing effect of property will be
too great. A middle approach is needed. Regulation must be subtle, done not with a
heavy hand, but rather, with, as Adam Smith suggests, an invisible hand."1 The key to
the middle ground may be related to another area Locke and Madison studied: religion.
As we learn from Locke’s writing on religious toleration, when people are inclined
toward some view and they find it attacked, the natural response is to defend it.72 As we
saw in Locke’s discussion of self-interest, the more severe, immediate, and concrete the
threat, the more vigorous the defense. Thus, the strategy is to bring about the opposite

conditions: remove the threat or make it as slight, distant, and abstract as possible. This

 

7' The idea of the invisible hand is falsely associated with laissez-faire economics. If that
had been Smith’s advice, he would have spoken of no hand at all

72 It should be no surprise that religious toleration was a topic important to Madison as
well (see Locke, 1950 and Madison, 1987a). A more complete study of the relationship
between religious toleration and political economy is in order, but would carry us too far
afield in the present study.

112

will allow people to let down their guard. It broadens their horizons and makes them
more receptive to others and therefore opens possibilities for cooperation.

This is the key to the moral benefit of Madison’s teaching. With a large diversity
of voices involved in the process, there is more interaction, livelier debate, and more
opportunity for preferences to be shaped by exposure to alternative views. Learning
about other citizens creates the opportunity that people can recognize mutual interests and
discover reasons to enlarge their own views. This suggests that the reason for keeping
the process broad and inclusive is only partially owing to the contribution diverse
interests have to make. The greater reason may be that they have something to learn.73

The most important thing rivals must learn is that a temporary sacrifice can be an
investment. In this light, policies they might otherwise see as wasteful could prove
beneficial. The importance of relying on mutual benefit over goodwill alone was clear
even to the F ederalists, for Hamilton writes that people are reluctant to:

part with money for purposes that have outlived the exigencies which produced

them, and interfere with the supply of immediate wants. Delinquencies, from

whatever causes, would be productive of complaints, recriminations, and quarrels.

There is, perhaps, nothing more likely to disturb the tranquility of nations than

their being bound to mutual contributions for any common object that does not

yield an equal and coincident benefit. (7:39).

Attention to this delicate fact would not only soften people and promote cooperation, but
it would also reduce the need for the side payments that we saw in the pluralist strategy.

Another reason is that as more interests are involved, more will feel they have had some

impact on the outcome. Therefore, even if the outcome is still distant from their

 

7" This is related to the concept of discursive democracy. See Bessette, 1980.

113

preference—and even if it is outside their indifference curve—they may have less
incentive to take actions that might circumvent the policy’s intended goals.74

This demonstrates the difference between republican leadership and social
control. In the pluralist strategy, political leaders directly choose the winners and losers.
They play a much more active role in determining outcomes, which means they privilege
certain views at the expense of others. In the regime model, leadership is, “indirect and
remote”. The role of leaders is to act as a conduit, bringing together diverse voices and
allowing them to engage in problem solving collectively. As Stone puts it politics is in
part “the art of arranging” (1989, xii).

The Fractured Public Sphere and the Suburbanization of the Soul

Over time leaders have allowed actions that weaken both of the conditions
necessary for a robust public sphere. They have allowed the size of the sphere to shrink,
and the tone to be poisoned. Twentieth century philosophers Hannah Arendt (1958) and
Jurgen Habermas (1991) have called attention to the changes in the public sphere in
liberal society. They have also related changes in the public sphere to social ills and
unrest. However, their work is less clear on the matter of what brought about the changes
in the first place. The preceding analysis of Locke and Madison may be helpful in this
capacity. In urban areas we have fractured the public sphere, dividing it into a multitude
of municipalities and then subdividing it further with the use of special districts and
targeted policy areas such as enterprise zones. At the same time, the policy we enact

serves to sharpen self-interest and encourage self-preservationist behavior. This

 

7" For exactly this reason it is worth considering the possibility that the legislative arena
is preferable to the judicial arena when it comes to controversial issues such as school
desegregation and even abortion.

114

organization is perfect for pluralism—which we have now seen is contrary to the spirit of
republicanism.

As we would expect, much of the trouble follows from a mismanagement of
private property. Tax and land use policy has vacillated between extremes of laissez-
faire and burdensome regulations. As we saw in Chapter Three and Four, neither is
compatible with Locke’s political economy. Both have had a negative effect on the
public sphere, narrowing self-interest and preventing the diversity needed for the
Madisonian republic.75 As Paul Peterson (1981) has shown, when property regulations
become too burdensome, those with the means exit, taking their wealth and their
contribution to the diversity of opinion with them. Recalling the argument in Chapter
Three, we see a serious problem. If people leave the city and take their wealth with them,
they effectively cut off the supply of spillover benefits to the less well off. Yet, as we
saw, it is access to these extemalities that forms the basis of consent to the institution of
private property (and liberal government). Thus, the act to cut off the supply is facilitated
by a government that no longer appreciates the need to control the effects of factions, and
the result is a further loss of legitimacy and a redoubling of the tendency to look out for
one’s private interests at the expense of the public interest. Madison’s critique of his own
time would aptly to our own:

It will be found, indeed, on a candid review of our situation, that some of the

distresses under which we labor have been erroneously charged on the operation

of our governments; but it will be found, at the same time, that other causes will
not alone account for many of our heaviest misfortunes; and, particularly, for that

prevailing and increasing distrust of public engagements, and alarm for private
rights, which are echoed fi'om one end of the continent to the other. These must

 

75 This is confirmed by Stephen Elkin (1987, 90-95), who found that systematic bias is
greatest in the issue of land use, which deals directly with property and therefore is the
issue most likely to invite narrow self-interest. Elkin also relates the problem to
pluralism at 55-59.

115

be chiefly, if not wholly, effects of the unsteadiness and injustice with which a
factious spirit has tainted our public administrations. (10:54).

The factious spirit has caused many to exit the public sphere and to assume a defensive
posture with regard to their private rights. Those who remain in the anemic public sphere
will become more narrowly attached to their opinions—a common reaction to a system
seen as adversarial. This, in turn, invites more extreme positions, which renders
cooperation all but impossible. Thus, if decisions are to be made, government may no
longer act as a broker bringing interests together into a cooperative forum, but instead it
must make itself a referee, choosing winners and losers. Thus, the politics of social
control are born out of the corruption of the public sphere.76

This helps us to understand whose voices are most subject to systematic bias.
Conventionally we are led to believe that systematic bias effects the poor and racial
minorities most. There is good reason to suspect this. After all, if we look at our cities,
we see that it is they who suffer most and they who most exhibit the signs of alienation
(Wilson, 1987). Likewise, poor residents of urban areas have lower than average scores
on “trust in government” assessments. Those who study the concept of social capital also
find that even if the rate of decline is no greater among the urban poor, the negative
effects stemming from decline are greater (Putnam, 312-317). Finally, at least since the
release of the Kemer Commission Report (1968), we have been alerted to the problem of
urban violence. However, to conclude that the poor simply exit from the political process
is incorrect. Low social capital does not translate into lower rates of formal participation,
especially voting (Berry, Portney, and Thompson, 1991). Consequently, it is too

simplistic to say that the rich simply dominate the public agenda. Politics is not so

116

simple; it is not king of the mountain. If it were, and if the rich were the clear winners,
getting to make their ideal preferences the outcomes, policy would reflect their exclusive
and narrow interests. There would likely be extremely low taxes and few public services.
The problems identified by Paul Peterson would not exist. Therefore, cities would be
packed with business and industry—and wealthy residents.

But this is not what we see. Indeed, the greater problem seems to be that it is the
middle who has exited the process, leaving politics to be conducted only between rich
and poor. That leads to the present day mutation of republican politics we call pluralism
and improperly ascribe to Madison. In such a regime, the government becomes a referee
and chooses winners and losers. Importantly, we note that it is not simply the middle in
the economic sense (although this is an important part of it) but also, it is the middle in
terms of interests or opinions that is alienated from urban politics. These are the voices
that were adversely effected by urban policy in the last half of the 20th century. These are
the people whose self-interest was narrowed to the point that they chose to exit the public
sphere and retreat to an alternative sub-regime that allowed them to live in isolation
(suburbia).77 Thus, suburbanization is a deliberate effort to escape from the city and
isolate oneself from the problems related to race, crime, and poverty (Harvey, 1973).
Suburbanization is in part a response to policy decisions that strengthened the desire to
leave, but suburbanization is also made possible by yet other policy decisions that

subsidized the cost (Jackson, 1985; Sugrue, 1996). One positive result of

 

76 On the polarizing effects of pluralist politics and the relation to social capital see
Putnam, 2000, 339-344.

77 Putnam (2000) presents significant empirical evidence on the declining participation of
the middle. Beyond voting, middle class alienation is examined in Warren, 197 8. For an
interesting account of the alienation of what might be called middle intellectualism, see
Wolfe, 1998a.

117

suburbanization has been the casing of certain cleavages within both the middle class
(Wolfe, 1998b) and the upper class (Brooks, 2000). However, the uneven pattern of
suburbanization has resulted in high levels of segregation based on class and race
(Harvey, 1989; Massey and Denton, 1993). Consequently, the central city is left with far
less diversity—generally the very poor who could not afford to get out and the very rich
who never needed to get out, and the many suburbs are tiny islands of homogeneity.
With no middle, cities lose the voices that make possible republican stability. Their exit
left urban politics to be a narrow set of tradeoffs between the patriarchal rich and the
dependent poor. Their exit rendered regime politics impossible.

This leads to the most significant level of the moral problem. Once the public
sphere is fractured into several sub-spheres and institutions arise to give the arrangement
official sanction, there develops a spirit of moral separation and moral difference. People
come to believe that their well being is independent of the well being of others in separate
sub-spheres, regardless of their geographic proximity. People exhibit what Alexis de
Tocqueville called individualism:

A calm and considered feeling which disposes each citizen to isolate himself from

the mass of his fellows and withdraw into a circle of family and fiiends; with this

little society formed to his taste, he gladly leaves the greater society to look after

itself. (1966, 506).

Furthermore, once people believe they have isolated themselves morally from the rest of
society, they are more apt to blame any defects in the society on the moral inadequacy of
others (Young, 1990). The result is a sort of moral complacency and consequently, an

intellectual complacency. Since we no longer identify certain conditions as problematic,

we stop searching for solutions at all. The public suffers a massive loss of creativity.78

 

118

Yet Tocqueville notes that “individualism is based on misguided judgement”
(1966, 506). People deceive themselves when they conclude that they can isolate
themselves from others and that their own welfare is completely separable from the
welfare of others. Recent history supports his position. The effects of a growing belief
that those who have left the city have insulated themselves from the welfare of urban
America and the resulting belief in moral difference are becoming clear. However, there
may be a price to be paid for this. The problems they thought they could escape and
insulate themselves from, crime, poverty, race, failing schools, are now showing up in the
suburbs (Fishman, 1987). So the attempt to cut oneself off from the well being of the city
is not only morally corrupt, it is also simply impossible. Suburbia looks more and more
like the city, as we see school shootings, workplace violence, road rage, and other signs
of collective desperation. Thus, the isolationist policies of suburban America have been

bad for the inner city, but also bad for the suburbanites who demand them.

 

78 This points to a serious, perhaps even tragic problem. It could be that creativity is born
out of tension, difference, and meaningful debate. Yet tension is contrary to our desire
for comfort. Perhaps we have come to confiise ends with means. Human nature would
have us desire comfort as an end. However, as we saw in Locke, this end is generally
pursued through uncomfortable means—labor, research, negotiation, collective action,
and the like, none of which are meant to be easy. It could be that if we attempt to make
the process itself more accommodating to our lust for comfort, if we attempt to make it
more expedient, we remove the tension that serves as the catalyst for creativity.
However, with the loss of creativity we fail to develop those goods, which serve the
greater comfort of the future. In other words, we sacrifice a process that was
uncomfortable but produced desirable ends for a process that appears to be more
comfortable, but has produced less desirable ends. In sum, our desire for comfort has
corrupted the soul of American politics and weakened our desire and ability to think
creatively at all. If this is true, then there is a force more harmful than systematic bias at
work: Creative solutions need not be kept off the agenda by procedural machinations, for
they are never thought of in the first place. A penetrating analysis of this problem is
Allan Bloom’s Closing of the American Mind (1987).

119

To counter the tendency toward individualism, Tocqueville recommends that
citizens be “bound to take part in public affairs” for in doing so, they “must turn from the
private interests and occasionally take a look at something other than themselves” (1966,
510). This calls to everyone’s attention the degree to which people are not, can not, and
should not be as independent as once thought. Furthermore, he notes that “when the
public governs, all men feel the value of public goodwill and try to win it by gaining the
esteem and affection of those among whom they must live” (ibid.). This seems to be
exactly what Madison had in mind as well. But people can not govern together if they do
not live together, and as we have seen, few people of diverse interests live together in the
fractured. public sphere of the modern metropolis.

This is the condition in which we find ourselves. We have abandoned the advice
of Madison, ignored the warning of Tocqueville. Systematic bias has become severe, the
public sphere has been fractured, and bourgeois morality has been corrupted, all of which
has had a profound effect on policy. Ironically, at exactly the same time people are
demanding a more active government, government is less equipped to facilitate problem
solving. This does not mean that the content of urban policy is simply poor nor that
policy has been an unqualified failure. Certainly good results have been achieved in
certain cases. But this analysis does suggest that other potentially beneficial policy has
been blocked. It also suggests that when decent policy is made, it is accomplished
through a deeply flawed process. Because of this, some very harmful policy gets enacted
and much of the decent policy is resisted and even offset by rival policy with contrary
intentions. Indeed, it may be fair to wonder whether, in a case where logically sound

policy is resisted by some element of the population, the same policy would have been

120

more acceptable had it been made under better conditions. Clearly the time is ripe to
consider whether anything can or should be done to restore a public sphere wherein self-
interest rightly understood can take root and people are once again drawn out of
themselves.

Conclusion

Having completed our study of self-interest we see how closely related regime
theory is to the basic principles of liberal political philosophy. Both assume that people
are rational in their decision making. Both appreciate that self-interested people may at
times act alone, but may also find reason to cooperate in collective action. Both are
concerned with the relationship between coalition formation, policy outcomes, and
regime stability. Finally, both understand the need for leadership, even in a liberal
society.

The discussion has also revealed the extent to which much of urban politics,
guided by the theory of pluralism, has strayed from the normative foundation of its
subject matter. The politics of social control create conditions that weaken the republican
spirit. Diversity is lost and self-interest is narrowed. Those who remain engaged in the
process are left to focus their energy on survival in the politics of social control. This
means that they give priority to tactics over problem solving. Consequently, government
becomes, in the language of Tocqueville, more despotic, choosing temporary winners and
losers in the interest of procedural expedience rather than facilitating a process whereby
people share in decision making. The damage that results is obvious: greater distinction
between the “haves” and the “have-nots” and a middle class that largely avoids public life

altogether.

121

We also learn something about the nature of innovation and creativity in modern
republics. First, it is likely the product of a dynamic that exists when a large number of
groups are involved in the process—enabling the policy process to become a sort of
dialectic. This dynamic is lost when the politics of social control reduces the number of
interests. However, there appears to be a reciprocal relationship between the robustness
of the public sphere and the quality of public policy. This chapter has given a theoretical
account of the reason productive policy requires a robust public forum. Furthermore, it
suggests that as the health of the public sphere deteriorates, the quality of policy will
decline. Finally, the analysis implies the converse as well: substandard policy can serve
to weaken the public sphere by dividing interests against each other and then narrowing
them so as to make compromise unlikely.

All of this suggests a need to extend the sphere once again—a process that must
begin with a proper balance in terms of property regulation. Changes in land use patterns
could be the first step in drawing the stabilizing middle back into public life and
moderating the difference between society’s winners and losers. A contention made
several times in this chapter is that the public sphere was damaged largely by inept policy
decisions, especially related to land use. Before attempting to rebuild the public sphere,
it may be usefirl to compare policy that has attempted to embrace liberal principles with

policy that has departed from them. We do this in the next two chapters.

122

CHAPTER FIVE

A Floor Without a Ceiling:
Redevelopment and the Social Production Model

On July 22, 1999 Governor John Engler signed into law the Michigan Urban
Homestead Act. This ten bill package sought to aid urban areas in neighborhood
redevelopment through two main features: The first reformed Michigan’s tax reversion
process, streamlining the way delinquent property taxes are collected and abandoned
property reverts to the state for non-payment of taxes. The second created a process
whereby abandoned houses and vacant land could be transferred to low- and moderate-
income families at the cost of one dollar.

There was an air of jubilance at the signing ceremony. The Governor stated that
“this legislation will bring the benefits of economic prosperity that much of Michigan has
enjoyed for the past several years to our urban areas and the people who need it most.”
The legislature sent a bi-partisan delegation who spoke positively about the package.
Mayors from many of the state’s core cities attended along with representatives from
interest groups as diverse as the Michigan Association of Realtors and the Michigan
Poverty Law Center. Even before the signing, newspapers editorialized that the
legislation marked a watershed in urban policy.79 All said, one might get the impression
that the legislation enjoyed widespread support from its inception.

However, this was not the case. There was initial doubt among political pundits
that the legislation would, or should, pass. During the planning stages, the Detroit Free
Press was skeptical, albeit hopeful, criticizing the record of Governor Engler and the

Republican majorities in both the state House and Senate on urban policy, musing that if

 

79 See particularly the Oakland Press Editorial Page, April 8, 1998.

123

nothing else, this would be an opportunity for Detroit to “call Engler’s bluff?“ Elected
officials were doubtful. Lansing Mayor David Hollister stated “this is too revolutionary
to get through the legislature in the foreseeable future.” Concerned interest groups hired
lobbyists to track, and if necessary fight the legislation. Indeed, the odds should have
been on the side of the skeptics: Similar packages had failed in the past, and other
economic development programs passed only after lengthy and contentious battles.

Academic literature helps us to understand the problem more fully.
Redevelopment policy generally follows one of two strategies: redistribution of wealth or
the attraction of capital through “supply side” methods. As Paul Peterson (1981) has
pointed out, to the extent that policy involves redistribution of wealth, it will have a
greater tendency to drive capital out of the city and invite opposition from business
interests. Others have noted that the opposite approach—a free market strategy—leads to
inequitable development: downtown regions prosper at the expense of neighborhoods
where redevelopment is needed most (Judd and Fainstein, 1999). Consequently, the fault
lines pit concern for efficiency against the desire to promote equality—with efficiency
generally winning out. This being the case, initiatives that would be beneficial to
combating poverty generally fail to make it onto the public agenda. This is even more
the case when the anti-poverty measure is connected to land use, for as Stephen Elkin
(1987) notes, land use policy is the area most susceptible to systematic bias, the creation
and maintenance of a governing system whereby particular interests are effectively

blocked from access to the public agenda.

 

80 Detroit Free Press Editorial Page, November 13, 1997.

124

The best indicator of systematic bias is the various coalitions that form on either
side of an issue. This is explained most clearly in Clarence Stone’s (1989) work on
regime theory. Stone focuses on the crucial role coalitions play, not merely in electoral
politics, but in actually governing. The way government, business, and civic interests
come together determines the particular character of a regime, what problems make it
onto the agenda, and the form solutions take. Where the problem of systematic bias is
greatest, we can expect to see narrow coalitions; where it is less of a problem, we will see
broader coalitions supporting the policy. This has significant effects on policy outcomes.
As Bryan Jones and Lynn Bachelor have argued (1993, 15-19), the nature of a particular
urban regime determines what ideas are available for consideration when it comes to a
particular policy problem. The collection of viable alternatives, which they call the
solution set, will be larger or smaller depending on the diversity of interests making up
the regime. Therefore, where systematic bias is especially intense, we will see fewer
interests involved in the process and thus particularly anemic solution sets. This reveals
the connection between the academic literature and the initial impressions of the pundits:
it is unlikely that a regime coalition will form in support of programs akin to the
Michigan Urban Homestead Act. This program is probably not in the solution set of
most regimes.

Nevertheless, the package overcame the initial skepticism. By the time it arrived
in legislative committee, there was a broad and diverse coalition supporting it, driving it
to eventual passage by overwhelming majorities in both chambers. This is owing to the
work done during the critical period after the idea was hatched and before the actual

legislation was drafted. In brief, the way the policy was framed attracted support where it

125

was otherwise not expected. In this regard, the Michigan Urban Homestead Act is
something of an anomaly—expected by neither pundits nor academics—and therefore
worthy of our attention. It offers not only an interesting case study of economic
development policy, but also a lesson in the application of liberal principles or regime
theory to actual policymaking.
The Challenge of Economic Redevelopment

Before we turn to a systematic discussion of the Michigan Urban Homestead Act,
let us first consider the issue of economic redevelopment more generally. The challenges
are well documented.81 First, redevelopment, as opposed to development simply, is
difficult to categorize. Using Paul Peterson’s typology, it appears to be a hybrid between
developmental policy and redistributive policy. The key is determining whether the
policy will be a net generator or consumer of tax dollars. For example, an effort to
redevelop a waterfront or build a stadium tends to be perceived as a tax generator and
therefore more purely developmental, whereas an effort to revitalize neighborhoods and
promote affordable homeownership tends to be perceived as a tax consumer and therefore
more purely redistributive. A second challenge lies in the empirical question that must be
answered: Does redevelopment primarily belong to the realm of economics or politics?
The answer will impact not only how priorities are set, but also what methods will be
used. Finally, there is a normative challenge: Since policy is often reduced to a tradeoff
between efficiency and equality, we are tempted to believe we must sacrifice one for the
other, further complicating the matter of priority setting. It would be very difficult to

settle each of these issues separately, since they are clearly intertwined. Fortunately, a

 

8’ For a historical overview see particularly Teaford, 1990.

126

great deal of work has already been done in the emerging field of regime theory that will
make our task simpler.
Economics or Politics?

Paul Peterson explains the difficulty of enacting local redistributive policy in his
City Limits thesis. Building on the work of Charles Tiebout (1956), Peterson argues that
cities seek to maximize their export industries, thereby enhancing overall fiscal health
(Peterson, 1981, 23 -24). To do this, a city must become as efficient as possible, striking
a balance between its level of taxation and the amount of service benefits it offers. The
problem is that the non-affluent consume a far greater share of services than they pay in
taxes. This requires that services be subsidized by those who pay more in taxes than they
consume in services. In this sense, even basic services are slightly redistributive (3 8).
According to Peterson, wealthy residents and large businesses will tolerate this only to a
certain degree. After the degree of redistribution exceeds an acceptable level, the rich
will take advantage of the fact that capital is mobile but a city’s borders (and thus its legal
authority) are fixed. Therefore, programs that raise the marginal costs relative to the
desired level of services will have a tendency to drive capital out of the city (49-50).
Businesses and residents who require fewer services and desire lower taxes will relocate
to rival cities where such a package exists. This leaves the more expensive city with less
revenue to provide services to those who stay—who in turn are more likely to need
greater services but lack the resources to pay for them. Realizing this to be the case,
cities seek to maximize their efficiency relative to other cities, which means avoiding

costly policies that would equalize residents’ living condition (69). In short, when our

127

method of conceptualizing and analyzing the problem is almost purely economic,
equality is sacrificed for efficiency.

A variation of the same problem occurs when cities attempt to avoid redistribution
by adopting market model strategies. The logic of such programs is not unlike the logic
in Peterson’s thesis: If the costs and burdens of redistributive policy drive the tax base out
of the city, perhaps reducing taxes and regulatory burdens in parts of the city will attract
new businesses and residents. This is the impetus behind Empowerment Zones.
Unfortunately, the evidence does not bear the theory out. Some businesses do locate to
urban enterprise zones, but few of them appear to be new businesses, but are instead
existing businesses that merely relocate. This would not be as grave a problem if the
relocating businesses hired people from the surrounding distressed areas, but seldom has
this been the case. The greater problem is that due to the tax breaks, these businesses
contribute very little to the support of city services, yet they still require sewers, electrical
service, maintained roadways, and police and fire protection. The burden of paying for
these services is therefore shifted to the surrounding neighborhoods. At best, laissezfaire
methods lead to pockets of development inside a city, but those pockets afford little
spillover benefit to surrounding residents who need it most (Lehmann, 1994). Once
again, the problem is seen as one of economics, and once again, unqualified dedication to
efficiency only compounds the problem of inequality.

There are others who approach the problem of redevelopment as a political rather
than an economic issue. The emerging literature on regionalism is the best example. The
goal of regionalism is to create a level of government that has unified power over an

entire metropolitan region. This regional government would establish growth barriers by

128

restricting the spread of infrastructure beyond the regional limits, then it would seek to
equalize conditions within the region by enacting tax base sharing—the transfer of
resources from one municipality within the region to another (Orfield, 1988, 62-65; Rusk,
1999, 23 8-42). In a sense, regionalism attempts to overcome the city limits problem by
extending the boundaries of government and limiting the ability of capital to escape
without fleeing to expensive rural areas that lack infrastructure. There are, however,
doubts as to the effectiveness of this strategy. First, lesser variations of it have existed for
years through combined city county governments (Miami and Indianapolis) as well as
through liberal annexation programs (Jacksonville and Houston). In none of these cases
have the conditions within the region equalized (Nivola, 1999, 63-64). Second, it is not
clear that the solution to the defects of one layer of government can simply be the
creation of a new layer of government. All local government is subservient to the state
legislature, where suburban interests have an advantage. Therefore, short of a statewide
land use policy, which few states have, there is nothing blocking the state from
subsidizing new infrastructure and a new wave of sprawl when wealthy interests
complain. This suggests that just as the economic determinists neglect the importance of
politics, regionalists and their ilk pay inadequate attention to the constraints of

economics.82

 

82 Regionalist’s do offer a particularly useful point: they identify with great alacrity the
problem of fractionalism among metropolitan governments created by suburbanization
and scores of special purpose districts such as school districts and transportation
authorities. Regionalists note that the best way to overcome this is to work at the level of
state government (Rusk, 1995, 90-98). This was the strategy in case of the Michigan
Urban Homestead Act.

129

It’s the Regime, Stupid

While accepting much of their basic logic, Clarence Stone seeks to moderate the
economic determinism of theorists such as Peterson. Stone agrees that economics
constrains choice, but at the same time, it is politics that plays the largest role in deciding
where, within those constraints, a policy decision ends up. Even more important, politics
has a reciprocal effect on economics, and therefore can serve to shape, and even expand,
the economic constraints. The driving question for regime theory is “how, in a world of
limited and dispersed authority, actors work together across institutional lines to produce
a capacity to govern and to bring about significant results” (Stone, 1989, 8). For this
reason, regime theory pays close attention to: 1. Who makes up the various coalitions
involved in a particular policy decision; 2. What brings together the various actors in
each coalition; 3. What sustains the various coalitions; and 4. How the coalitions help to
shape policy outcomes (including not only what gets done, but sometimes more
important, what does not get done).

Regime theory emerged in part as an alternative to the pluralist and elitist debate
over the role of power in policymaking. At first blush, these models appear to be
opposites. Elitists argue that power is concentrated in a small number of hands, generally
large business interests, who use their power to control government officials and insure
that policy outcomes preserve their social and economic advantage (Hunter, 1953). Thus,
researchers find an inordinate bias toward the status quo and little opportunity for
progressive policy alternatives (Harding, 1995). Pluralists, on the other hand, argue that
power is distributed more widely (albeit not equally) throughout the society among

organized interests. No single group is generally strong enough to dominate the agenda,

130

so several groups form temporary coalitions and compete against rival coalitions on
specific issues (Dahl, 1961). However, common interests from one issue seldom carry
over to the next. Therefore, as issues vary, so does the makeup of the competing
coalitions. As a result, few people find themselves in the winning coalition on every
issue (Dahl, 1982). Thus, there is no permanent majority, meaning there is greater
opportunity for progressive outcomes (Wolfinger, 1973). This debate gave way to
extensive literature that attempted to operationalize and test the models. Researchers
assumed they were engaging in value free science. Whichever model best fit a given
context was applied. However, the competing paradigms fell quickly into conflict:
Disputes arose over contested terrain as each school argued its model best fit a particular
city.

Some have pointed out that pluralists and elitists share common empirical errors
regarding the nature of power (Bachrach and Baratz, 1962; Lukes, 1974). They err in
treating power as if it were tangible and therefore directly observable and measurable.
For this reason, they are able to personalize power; it is a possession belonging to
different groups in varying amounts (Harding, 1995, 38-41). This leads us to assume
power is used for the sake of control: Those who have it in greater amounts tend to
control the process and in turn the actions of those who possess it in lesser amounts. In
this regard, power comes to be seen as a zero sum good: as one entity gains power
another must lose an equal amount of power. However, there is reason to believe that the
differences between the two models have less to do with actual differences in the real
world than with differences in their respective methodology (Judge, 1995, 19).

Consequently, when we move from our theoretical framework to the real world, we find

131

 

that power is a more abstract and dynamic phenomenon. It is not tangible and therefore
not so easy to observe, measure, and quantify in the direct sense that pluralists and elitists
would have us believe. In scientific terms, the models lack external validity (Bachrach
and Baratz, 1962, 949, 951). Yet this is more than a methodological issue: If the nature
of power differs from the assumptions of our models, it is likely that the way power is
used differs as well. Thus, there is reason to doubt that power can be used simply as a
device of control. Seen in this light, the differences between pluralism and elitist theory
all but disappear.

Less attention has been paid to the normative implications of the social control
models. In taking note of this, we realize that policy makers may learn from the models
in ways that academics do not necessarily intend. What was intended to be a value free
descriptive model turns, in the hands of policy makers, into a strategy. If the policy
process invites groups to compete against one another, there arises a need for a referee to
determine the winners and losers at the end of the competition. Government fills this
role. Once able to control the policy debate, elected officials are able to become, in the
literal sense, agents of social control, framing policy in such a way as to pit interests
against each other.83 This allows for manipulation of the rules, and therefore of the
political agenda, so as to favor certain groups at expense of others. That is, once in
control of the agenda, elected oflicials may dictate outcomes without appearing to be

undemocratic to the casual observer (possibly picking winners who can return favors).

 

83 Dahl argues that this is the Madisonian solution to the problem of factions (1956, 30-
32, 133; 1989, 218-19). This is based on a hasty reading of Federalist #10 and leads to
conclusions Madison would neither endorse nor recognize as his own. It has, however,
taken root in contemporary democratic theory (see Parenti, 1980).

132

This is a point positive theorists such as Willaim H. Riker (1986) have made.”4 As a
result of government assuming the role of referee, it also assumes an obligation to
mitigate the zero sum nature of group competition by making side payments of select
benefits to the losers.“ However, this introduces a series of additional normative
problems for democratic values related to citizenship and leadership: First, because
government assumes the obligation of making side payments to the losers, it has an
incentive to keep as many interests out of any given debate as possible to minimize the
cost. Thus, the civic debate and the public agenda are constrained—artificially. Interests
that otherwise would be articulated are not; ideas that might otherwise solve problems go
unexplored.86 Second, the process as a whole intensifies adversarial relations among
groups and encourages them to engage in ledger checking. They constantly assess and
reassess their number of wins and losses at the hands of government, not only in absolute
terms, but also relative to rivals. Finally, the process creates greater chances that policy
outcomes will be in conflict with the rights of certain groups or the public interest in

87
general.

 

8" One virtue of Riker’s work is that even as he refrains from making normative
applications of his conclusions, he does call attention to the possibility of doing so and
invites readers to do so on their own.

85 Stone (1989, 40) offers the example of land set aside for the historically Black college,
Atlanta University, as a side payment to appease Blacks who were on the losing end of a
land deal during urban renewal.

86 Stone notes that the debate over historic preservation was artificially narrow—framed
in such a way that no common ground could possibly be found first among the historic
preservationists, and secondly between the preservationists and the business community.
Therefore, the prospect that all property values are interrelated was never explored
(Stone, 1989, 127).

87 In Madisonian terms, the process will fail to control the effects of factions and
therefore invite the problem of instability. See Chapter Two for a fuller discussion.

133

This is best understood by way of two examples from Stone’s Atlanta research:
First, the social control model allowed the enactment of policy that was not necessarily in
the public interest. During the early urban renewal projects, large landowners from
downtown joined forces to make sure that it was smaller landowners in the adjacent
neighborhoods who were displaced, then they worked to secure the same land for
expansion of the business district (Stone, 1989, 16). Thus, the wealthy enjoyed the
benefits while the less well off bore the burdens. In the second example, the social
control model prevented the passage of a policy that would likely have been in the public
interest. Neighborhood activists and historic preservationists from across the city
attempted to unite to support a major conservation program. However, when they came
up against an organization of pro-development land owners—the same organization that
skewed the urban renewal debate—the “preservationists failed to unify around an
alternative to an investor-guided development process” (126). The reason is telling:
when the proposal reached the city council, the preservationists failed to maintain a
unified front, and given the nature of pluralism, when the council had to choose between
a unified business community and a fragmented group of concerned citizens, it chose the
former.

There is ample evidence for my supposition that academic models can influence
the real world. This was, after all, the explicit intention as the 19th Century closed and
the 20th began and the Progressive Movement sought to “rationalize government in order
to rationalize society” (Wilson, 1989, 376).88 The advocates of Progressivism, from

philosophers such as John Dewey to politicians such as Teddy Roosevelt (and even more

 

88 I thank Richard Hula for calling this important point to my attention.

134

so, Woodrow Wilson who attempted to be both), sought deliberately to change the way
policy is made and implemented through the application of scientific principles. With
respect to local government, the movement’s chief proponent was Andrew White, who
argued that:

what is most needed in regard to municipal public affairs, as in

regard to public affairs generally, is the quiet, steady evolution of

a knowledge of truth and of proper action in View of it. The truth,

as regards city government, is simply the truth that municipal

affairs are not political. (White, 1998, 126).89
White and his followers influenced attitudes regarding how policy should be made and
implemented, and also shaped the criteria by which policy is analyzed and evaluated—
stressing the importance of efficiency (Schiesl, 1977). Yet the most significant impact of
the Progressives was the introduction of new institutions, including the city manager, at--
large council, and professional bureaucracy, to facilitate these new public values (East,
1965)

After years of neglect, contemporary literature has once again begun to
acknowledge the connection between the policy process and civic values. From the side
of the practitioner, Robert Reich (1988) has called attention to the effect of “public ideas”
on the policy process. The reverse, the impact of policy on citizenship has also been
explored in both a theoretical treatment by Stephen Elkin (1987, 84) and a more

empirical study by Helen Ingram and Anne Schneider (1993). Beyond the subfield of

public policy, we also see two very different areas of political science taking up this

 

89 This is not to imply that the Progressives were a homogeneous group. Some focused
on structural reforms; others on social or behavioral reforms. Some, such as Dewey,
were democratic in disposition; others, such as White, were weary of democracy. The
unifying theme was a belief in the ability of scientific rationalism, grounded in “big
ideas” to improve the general welfare of society. For a historical treatment that is
sensitive both to the diversity and unity of Progressivism, see Finegold (1995).

135

issue. First, Robert Axelrod (1984), a positivist, concludes his very important work--a
work often held up as the epitome of rigorous science--by making recommendations for
applying the lessons gleaned from his work to the real world. Second, the emerging
influence of postmodern philosophy, seen most clearly in the work of Deborah Stone
(1997), notes that even when researchers are not explicit about the normative
implications of their work, they still exist implicitly. Tying these strains together, it
seems doubtful that any step in the policy process can be value free. The values that bear
on the process must come from somewhere. My contention is simply that it is plausible
that after more than a generation of teaching students in government classes about
pluralism, this is one likely source of those values.

This brings us to the virtue of regime theory. The regime analysis of power is
scientifically more valid and robust, and it is less in tension with our normative
principles. Rather than assume that government exists to referee, the social production
model begins with a policy goal and then determines the kind of coalition that leaders
must bring together and sustain in order to accomplish that goal. Thus, power is not
wielded by some over others; it does not describe the players in the process, but is a
dynamic current that describes the entire process itself. Rather than speak of “power
over” something, it is more appropriate to speak of “power to do” something (Stone,
1989, 229). That is, power is not a controlling force, but a productive force. It should be
noted, however, that to the casual observer, this might appear similar to social control;
government still plays an important role in the process as it acts to bring the various
interests together. However, under the social production model, government has an

interest in bringing a greater number, and more importantly, a greater diversity of

136

interests into the process. More important, while government still has some control over
the process, it has far less control over the outcomes, at least in the direct sense. This
makes it more conducive to problem solving. Four points follow from this: First, because
its focus on coalitions goes beyond “counting votes and sorting through the wants of
rational egoists” it is a more valid way of describing the world (Stone, 1989, 23 9).
Second, as a model, it is more robust in that it encompasses the best aspects of pluralism
and elitism. That is, regime theory takes into account the importance of coalition
behavior as does pluralism, but it also takes into account the disproportionate advantage
enjoyed by business interests noted by elitists. Next, Regime theory is more explicit
about its intention to be both descriptive and prescriptive (Stone, 1989, 254-58; Elkin,
1987, ix). Finally, whereas the social control model has a normative bias that is at odds
with our values of liberalism and democratic republicanism, regime theory’s social
production model, when used as a prescriptive strategy, is more harmonious with the
normative principles of modern liberalism. Therefore it is more likely to lead to
outcomes that are publicly acceptable.

Operating under the social control model for decades has proven detrimental to
urban areas—especially in terms of economic redevelopment. Land use is an especially
delicate issue because, as Stone notes, “the value of any parcel of land is heavily
influenced by uses and investment decisions on adjoining parcels” (Stone, 1989, 137).
Therefore, when the city decides to spend resources on a redevelopment project, nearly
all property owners want the project to raise the value of land near their own. In almost

every case, business interests succeed in having the redevelopment project located

137

90 Thus, we see more resources devoted to building the components of what

downtown.
Dennis Judd calls the “urban tourist bubble” including athletic stadiums, convention
centers, and waterfronts than we see being spent on neighborhood development or the
promotion of affordable housing (Judd and F ainstein, 1999).91 In Stone’s words,
“housing for the non-affluent, who lack a power base, gives way to competing demands”
(143). More bluntly: the poor simply lack the resources to compete under the social
control model, which has had grave consequences for the American city.

Yet, we are left to wonder why particular interests are routinely favored over
other interests. It would seem at least logically possible given the complexity of the
world, the number of potential interests, and the variety of issues, that we might see some
groups left off the agenda on one issue and other groups left off as the issues changed.
That is, there would still be bias, but the target of bias would shift as the issue varied.

This might not be ideal, but it would be less damaging to democracy than systematic bias,
where the same interests are consistently left out (Elkin, 1987). However, this is not the
case: Stone and others report that it is consistently the business elite who are favored over

non-affluent interests.’2 This is because where government picks the winners and losers,

it has an interest in making business the winners to protect its tax base, and unfortunately,

 

90 Conversely, when it comes to siting a public housing project or a freeway, it is poor
neighborhoods that bear the brunt of the burden.

9' Casual observers who restrict their visits to the tourist bubble are then led to conclude
that most cities are making a comeback: they see a new stadium, a redeveloped
waterfront and an occasional new restaurant or nightspot and decide that the city has been
rejuvenated.

92 Even a regime that declares its intention to promote the interests of the poor can not
escape this. Such regimes generally discover the impossibility of governing without the
business elite and quickly change their priorities, such as Atlanta under the Mayoralty of
Andrew Young (or they simply perish out of ineffectiveness such as the Maynard
Jackson regime).

138

policy tends to pit the concerns of business against those of progressives. This is a
refinement of Peterson’s argument: The nature of policy has an effect on its viability,
although not necessarily in the direct linear manner that Peterson suggests. Policy is
framed in such a way as to pit equality against efficiency. Large business elites are
primarily interested in efficiency whereas progressives are interested in equality. The
essential point: Systematic bias is the ultimate result of government picking winners and
losers, a task it has accepted due to the perceived tradeoff between efficiency and
equality. This leads to the most important set of questions: Why does policy tend to pit
equality against efficiency? Is the tradeoff necessary? Can anything be done to ease the
tension? These are explored in the next section.

Efficiency vs. Equality: The Necessary Tradeoff?

In support of the notion that efficiency and equality are at odds, many cite the work of
Arthur Okun. According to Okun, the tension is the result of “uneasy compromises”
between market economics and liberal institutions. He elaborates: “to the extent that the
system succeeds, it generates an efficient economy. But that pursuit of efficiency
necessarily creates inequalities. And hence, society faces a tradeoff between equality and
efficiency” (Okun, 1975, 1).

The tradeoff manifests itself in many ways. For example, if we seek to promote
equality too directly through a process of wealth redistribution, we encounter not only
political opposition from the wealthy, but we also effect their economic behavior in ways
that actually harm the poor. In Okun’s example, “measures that might soak the rich so
much as to destroy investment and hence impair the quality and quantity of jobs for the

poor could worsen both efficiency and equality” (4). Put metaphorically, “any insistence

139

on carving the pie into equal slices would shrink the size of the pie” (48). On the other
hand, if we seek efficiency without qualification, we create other problems for equality
and rights. This is because Okun’s working definition of efficiency assumes that the
default bias of efliciency would lead the rich to get richer and the poor to get poorer, and
his working definition of equality assumes that wealth can purchase a greater share of
rights either directly or indirectly (22).

Still, the picture need not be so bleak. Okun does offer at least a hypothetical
example of the way equality and efficiency could be jointly enhanced. He suggests that
“techniques that improve the productivity and earnings potential of unskilled workers
might benefit society with greater efficiency and greater equality” (4, emphasis in
original). Elsewhere he offers two general strategies for easing the tension. First is what
he calls “upside down economics”. The idea is to raise the cost of upper marginal growth
so that the rich find it less worthwhile to increase their wealth.93 The second strategy he
calls the “floor without a ceiling” approach. Here the idea is to tolerate upper marginal
growth, but link it to lower marginal growth, so that if the rich desire to get richer, they
incidentally raise the living standards of the poor along the way. Okun does not oflicially
endorse one or the other of these strategies, but it would seem that the floor without a
ceiling approach best reflects the hypothetical example discussed above.

Before turning to Okun’s formal policy recommendations, there are two
additional assumptions he makes that are worth noting. First, he denies that there is any
ethical basis for capitalism, arguing that its only justification is its efficiency (64). In so

doing, he rejects the labor theory of value, which he calls the marginal productivity

 

93 What it really does is increase the marginal value of leisure, so rich people spend more
time consuming their wealth than expanding it. See Okun, 96.

140

theory. That is, he denies that a person should be rewarded economically based on the
amount of labor he or she contributes. His second additional assumption is that the only
reason people object to redistribution is because of the inefficiency attached to it due to
information, administration, and transaction costs, as well as corruption. He uses the
analogy of a leaky bucket to illustrate typical redistribution schemes, and implies that if
the leaks could be plugged, people would support redistribution (91-95). That being said,
his recommendations for easing the tension between equality and efficiency focuses on
raising the top marginal income tax rate and increasing both the estate tax and the capital
gains tax.94

A complete criticism of Okun’s assumptions is not necessary. It will suffice to
reserve criticism primarily to his policy recommendations, and only as they bear on the
social production model. It is difficult to see how a series of tax increases on the rich will
do anything other than discourage upper marginal growth. Okun as much as admits this
himself in the playful comment that “high taxes are followed by attempts of ingenious
men to beat them as surely as snow is followed by little boys on sleds” (97).
Nevertheless, the plan fits with the first of his strategies, inverse economics. However, it
is not clear how this actually helps the poor, or how it avoids the problem Okun himself
notes when admitting that an attempt to carve the pie into equal slices reduces its size.
What is more, his substantive recommendations seem to betray the principles found in
statements such as “if the losers can still lead a decent life, prizes for the winners in the
form of swimming pools and bigger houses seem especially innocuous in terms of their

social impact” (49-50) and “the thousand dollar a day lawyer need not be a grave threat if

 

94 We should bear in mind that Okun wrote this in 1975 when the top marginal rate was
already much higher than it is at the end of the 20th century.

141

adequate public defenders are available” (31). These statements are much more in line
with his second strategy of linking upper marginal growth to lower marginal growth, yet
on this point he abstains from any substantive recommendations. The most significant
criticism of this is that none of his recommendations are likely to inspire the kind of
coalitions needed for getting them passed, easing systematic bias, and encouraging social
production and problem solving. This brings us back to regime theory.

Applying the Social Production Model.

Although Clarence Stone acknowledges the tension between efficiency and
equality, he takes more seriously than Arthur Okun the possibility of easing that tension.
This is because Stone has a different understanding of the problem both empirically and
normatively. Empirically, Stone argues that “effectiveness is itself a complex
phenomenon—too complex to constitute a simple tradeoff with equity” (1989, 201).
Likewise, while there is clearly some relationship between economics and human
behavior, Stone doubts that it is linear in the way Paul Peterson’s city limits thesis
assumes (164). But even more important is that Stone’s empirical observations can not
be divorced from his normative vision for the city. He realizes that as long as we accept
the tradeoff as inevitable, leaders will continue to embrace the politics of social control:
In a sense, thinking it makes it so. This means that participation will be discouraged,
rather than encouraged. As a result, regimes will refi'ain fi'om progressive policymaking
and permit systematic bias to continue. By allowing creative alternatives to go
unexplored, policymakers fail to address the problems of the city as firlly as possible.
Quick fixes coupled with side payments to losers continue to be preferred over long term

problem solving. This serves as the basis of the two general recommendations for

142

applying the social production model: Promote civic engagement and frame issues
effectively. This is the constructive side of regime theory.

Social production is “the capacity to assemble and use needed resources for a
policy initiative” which requires bringing more interests into the process and encouraging
civic engagement (1989, 227). This means arranging the process in such a way that
interests who once saw each other as natural adversaries under the social control model
now have incentive to talk to each other. As Stone puts it, “we should see reform as a
more diffuse process of establishing an environment within which new relationships can
take hold” (1999a, 4). Ideally, goodwill forms among former adversaries, but in reality,
mutually recognized, long term self-interest is sufficient. This idea of civic engagement
is not unlike the advice Madison offered the new republic in Federalist #10: “extend the
sphere and take in a variety of interests.” By increasing the number and the type of
stakeholders politics need no longer simply pit one against the other. We transform a
zero-sum game into a variable sum game, meaning that in every issue it becomes likely
that no single interest wins, and no single interest loses. Instead, everyone gets some
degree of benefit. As a result, the system not only benefits from an infiision of new ideas
and creative alternatives, but it also abandons the need for side payments to the losers.
The problem is that even though “we know that relationships of civic engagement do
develop and provide a capacity for ameliorating social problems, we don’t know much
about the conditions under which they form or what gives them durability” (1999a, 24).

Stone identifies the framing stage of the policy process as key to bringing about
those conditions (1999b, 7). In large measure this will involve framing the issue so that

efficiency and equality appear to be less in tension. The implication is clear: the tension

143

is in large part an artifact of poor policy framing, and as a result, a given issue appeals
less broadly to groups, and does so in a manner that places them in an adversarial
relationship. It is unlikely that framing can remove the tension entirely, and it is doubtful
that it will work in all cases, but it should go a long way toward mending the rifts that are
taken for granted under the politics of social control. With this, we see another
refinement of Peterson’s core logic: The nature of a piece of policy does have impact on
its likelihood of success. Peterson errs only in cutting short the discussion and failing to
consider the ability of political discourse to shape preferences and broaden self-interest.
This also refines Okun’s key point: the underlying need to balance concern for equality
against regard for efficiency still exists, but now the fulcrum upon which that balance is
struck is politics. This means that politics must be understood less as “who gets what”
and more as “the art of the possible” which requires a greater degree of subtlety and
insight. In Stone’s words, “effectiveness for a regime acting in the name of the whole
community thus calls for broad comprehension of social change and awareness of a wide
range of situations and potential consequences” (1989, 211). It is exactly this insight that
guided the Michigan Urban Homestead Act.
The Changing Michigan Landscape

Economic development policy has had a controversial history in Michigan. It has
also had varying degrees of success, related closely to mayoral leadership as Bryan Jones
and Lynn Bachelor have demonstrated (1993). However, there has been one consistent
theme: Policies claiming to enhance economic development have often been used to veil
programs that contribute to segregation and disinvestment (Darden et. a1, 1987). This

was certainly the case with urban renewal and the first wave of public housing which first

144

created incentives for middle class whites to leave the city then subsidized their flight to
the suburbs (Sugrue, 1996).95 More recently, programs such as tax increment financing
and quasi-privatization schemes including principle shopping districts and business
improvement districts allow business interests to insulate their wealth and recapture their
tax dollars for their own use. At the same time, generous tax abatements coupled with
Michigan’s variation of the enterprise zone, called the renaissance zone, have shifted the
burden of financing municipal services away from downtown and into the
neighborhoods. For all of these reasons, it is not surprising that these proposals invite a
great deal of contention in the legislature, often dividing sharply on party lines, but also
along racial lines. Likewise, it is not surprising that new economic development
programs face increasing amounts of suspicion. Nevertheless, contention was almost
nonexistent in the case of the Michigan Urban Homestead Act. As we shall see, success
is owing to the shift away from the social control model and toward the social production
model.
The Michigan Urban Homestead Act

Initially the plan was only to create a low- and moderate-income housing program
that encouraged the rehabilitation of city owned vacant houses. However, early in the
research stage it was discovered that the stock of houses available for homesteading was
beyond mere disrepair; it was dilapidated. Indeed, the cost of rehabilitation would far
exceed the means of low- and moderate-income families. Furthermore, in nearly every
case, city owned vacant houses suffered fi'om clouded title, creating legal barriers to

conveying the property to new owners. As a result, in many cities the volume of

 

9’ As Kenneth T. Jackson (1985) has shown, this problem is not local to Michigan, but
was the dominant trend in all of America’s urban centers.

145

abandoned property grew to unmanageable levels.96 Investigation revealed that the same
culprit was to blame for both the structural and legal obstacles: the tax reversion process.
Therefore a decision was made to connect the two issues: Reforming tax reversion would
improve the supply of houses available for urban homesteading. and an urban
homesteading program would offer cities a new tool for disposing of reverted property.

The tax reversion process in Michigan is governed by the General Property Tax
Act.97 According to the statute, all real property taxes are due on January 1St for the
preceding year and are considered delinquent on March lSt if they are not paid. Local
units of government (cities, villages, and townships) compose a delinquent tax roll, which
they turn over to their county treasurer who is the chief tax collecting agent. The county
treasurer immediately reimburses municipalities and all other taxing jurisdictions (school
districts, transit authorities, libraries, and park systems) out of a special revolving fund,
so that they need not carry delinquent taxes as debt. County treasurers capitalize the
revolving funds by selling delinquent tax anticipation notes, which they pay off as they
collect taxes, interest, and penalties from property owners.‘98

Two years after receiving the delinquent taxes from the local unit of government,
the county treasurer holds an auction selling a lien against the property to anyone willing

to pay the outstanding taxes, interest, and penalties. Whoever buys the lien then assumes

 

96 For example, officials from the City of Detroit acknowledged in testimony before the
Michigan House Committee on Local Government and Urban Affairs that they had an
estimated 40,000 parcels of abandoned property in 1999. This is consistent with the
findings of a University of Michigan School of Public Policy study titled “Abandoned
Commercial Property in Detroit” released April 25, 1998.

97 The standard citation for the General Property Tax Act is M.C.L. 211.1. The
delinquent collection process is specified in sections 55-131e. My summary is based on
reading the legislation, but helpful commentaries can be found in Smith (1996) and
Bogdan (1997).

146

primary responsibility for collecting the debt; no legal interest in the property transfers at
this time. If the taxes remain unpaid a year later, the lien converts to a deed and the deed
holder is entitled to a penalty of 150% of the tax value. If the penalty goes unpaid, the
deed holder may seek foreclosure in the courts. The county treasurer transfers those
parcels which fail to sell at the lien auction to the state Department of Treasury where
they sit for another year, continuing to accrue interest and penalties.

If nobody redeems the taxes after the third year, the foreclosure process begins.
The state orders a title search and attempts to notify all parties discovered to have a legal
interest in the property. Within the next year, the Department of Treasury holds an
administrative hearing, after which, if the taxes remain unpaid, a new title is issued in the
name of the state. The Department of Treasury then transfers responsibility for all tax
reverted property to the state Department of Natural Resources for final disposition. The
Department of Natural Resources visits the property, assesses its value and either
schedules it for auction or conveys it back to the local unit of government.99 In rare cases
the Department of Natural Resources may elect to retain the property for public use—
generally only when the property is contiguous to existing state land such as a park,
forest, or other recreation or conservation area. Altogether, the process could take more
than five years and involve complicated tradeoffs among municipal, county, and state

officials, not to mention investors from the private sector.

 

9” Interest accrues at 1.25% per month (15% APR), and several flat rate penalties attach
to the tax bill at various stages in the process.

99 The Department of Natural Resources holds eighteen real estate auctions each year.
Unlike the county lien sales, theSe auctions convey ownership in the property, although
there are generally problems clearing the title as noted below.

147

There are several problems associated with the tax reversion process. '00 First, by
most accounts, the rights of property owners were in peril. According to the United
States Supreme Court, property owners facing adversarial action for non-payment of
taxes are entitled to notice and a hearing wherein they may challenge the delinquency. 10'
Proper notice requires that all persons with a legal interest in the property be discovered
through a complete title search and a search of other relevant documents. ’02
Unfortunately, the large volume of delinquent parcels (more than 10,000 per year)
requiring such treatment makes the cost of adequate discovery prohibitive. According to
the Department of Treasury, the state was paying an average of $20 per parcel for title
work—far below the actual cost for reliable information (in the committee hearings real
estate experts testified that the typical cost for a quality title search is $150). As a result,
cases arose with considerable frequency where property was foreclosed without all
owners receiving notification. Each case lead to a successful legal challenge which has

caused the title insurance industry to balk at all tax reverted property; for them it is

 

"’0 Many of these points were brought to light in testimony offered by the Hudson

Institute before the Senate Committee on Economic Development and Regulatory Affairs
on March 9, 1999 and before the House Committee on Local Government and Urban
Affairs on March 18, 1999.

'0’ See Mennonite Board of Missions v. Adams, 462 US. 791 and Dow v. State of
Michigan, 396 Mich. 192. Note that this is not the appropriate forum for challenging the
tax itself; the only challengable issue is whether the taxes are in arrears.

’02 Other appropriate records include assessment records and probate records. Michigan
also draws a distinction between a primary and secondary residence, taxing the primary
residence at a lower rate. In order to qualify for the rate reduction, homeowners must file
an affidavit with the local treasurer. These are also useful in determining ownership
interests. Michigan does not, however, require that the parties to a land contract sale file
any records until the sale is complete (often several years after initiation). This creates a
fairly large category of people with unrecorded interests. Since land contracts are often
the instrument of sale in cases where conventional mortgages are unavailable, due to the
credit or income situation of the purchaser or the age or condition of the house, there is a
high concentration of these sales in older urban neighborhoods. Not coincidentally, the
pattern of tax delinquency and abandonment follows.

148

simply a bad risk. This means that before the property can be reused, whoever receives it
from the state must perform new title work and sue for quiet title in circuit court. This
drains valuable resources that might otherwise be used for rehabilitation.

A second problem is that the system exacerbates the financial hardships of poor
families and creates opportunities for them to be taken advantage of. A five year
redemption period seems generous, but in reality, it merely extends the time for interest
and penalties to accrue. By the time a $1,000 tax bill comes to the end of the process, a
family would have to pay a minimum of$2, 100 to avoid foreclosure. To make matters
worse, the law required that if the property was more than three years delinquent, an
owner would have to bring all taxes up to date, not simply pay the oldest year’s taxes.
This means that in the most severe cases, where a family is chronically delinquent
perhaps due to a job loss or the illness or death of a wage earner, a family might have to
come up with nearly ten thousand dollars to avoid foreclosure. In cases where the lien
was sold at county auction, responsibility for collecting the debt shifts to private
speculators. The people who purchased tax liens were seldom interested in the property
itself, but only the potential of nearly doubling their money within two years. ’03 When the
legislature began hearings on reforming the process, a good deal of evidence was
presented of lien buyers misrepresenting themselves as agents of the government, using
intimidation tactics, and otherwise violating the spirit of the law at the expense of

delinquent property owners.

 

’03 Indeed, the Michigan system was featured in television infomercials and web sites
such as www.taxsales.com and www.taxforfeited.com making these very claims.

149

The gravest problem stems from the length of time it takes for a parcel to pass

completely through the system. ’04

While there are many responsible landlords in
Michigan’s cities, unfortunately, there are also plenty of slumlords. These people charge
high rents for low quality houses, often in poor condition. In order to maximize their
return, they often allow the taxes to go unpaid, knowing that it will take several years for
the system to catch up with them. In the meantime, they allow the house to fall further
into disrepair. Ultimately, they allow the house to revert, apparently caring little about
the devastating effects on families and neighborhoods. Greater problems arise when the
structure is unoccupied. Michigan’s winters are cold and snowy. Five years can
transform a vacant house into a pile of rubble. Aside from the structural damage, vacant
houses wreck havoc on a neighborhood: They attract dumping, which is both an eyesore
and harmful for the environment. Worse, these structures can provide cover for criminals
and increase the risk of fires.

Abandoned houses also impose financial burdens on the community beyond lost
tax revenue: Even though the procedural responsibility for these parcels has shifted to the
county or to investors or to the state, the fact is that the structure itself remains in the city
and in the neighborhood. If the windows are to be covered with boards in hopes of

keeping vandals out, the cost is bore by the city. If the weeds are to be cut and rubbish

hauled away, the cost is bore by the city. When the time comes for the structure to be

 

'04 As noted above, if the lien remains in the hands of government it takes approximately
five years to process. In cases where the lien is sold to a private investor, the lien
converts to a deed one year after purchase from the county treasurer. This gives the
investor the right, but no obligation to foreclose after the three year mark. Since few lien
buyers are interested in taking title to the property, this seldom occurs. In such cases, the
lien expires five years after converting to a deed—a total of eight years after the initial
delinquency. In the meantime, the clouded title makes it nearly impossible to transfer the
property.

150

demolished, that cost, too, is bore by the city. Finally, the lengthy, confusing process
compounds the difficulty of assembling land for major redevelopment projects therefore
discouraging reinvestment. In the words of Mark Horrigan, City Councilman from Flint,
“these abandoned houses are nothing more than billboards telling people to leave.” ’05
Altogether, the tax reversion facilitated slumlording, imposed both social and financial
costs on local government, and discouraged neighborhood reinvestment; it is the key
component of a circuit of blight. For this reason, the General Property Tax Act was
redrafted, the goal being to make the process shorter, simpler, and more certain. ’06

The entire process was shortened: County Treasurers would no longer hold the
delinquent tax roll for two years before taking action to collect. The additional year
following the lien sale was also eliminated, meaning title work begins on delinquent
parcels fourteen months after delinquency. Therefore, the length of time from initial
delinquency to foreclosure would now be two years and final disposal of reversions
would take only an additional four to nine months. A process that used to grind on for
more than five years would essentially be cut in half. No longer would the tax reversion
system serve as an invitation to absentee landlords to milk property of its value while

shirking the obligation to maintain their property. The circuit of blight would be

disconnected.

 

’05 Over several months in 1998 the House Committee on Urban Policy and Economic
Development held bearings in central cities throughout the state. On November 24, 1998
it released a report summarizing the hearings. Councilman Horrigan’s comments appear
on page six of the report. The connection between tax reversion and blight is also made
in a report issued by the Citizens Research Council of Michigan titled “Delinquent
Property Taxes as an Impediment to Development in Michigan.” The report is available
on line at www.crcmich.org.

’0 6 The summary that follows is based on a reading of PA 123 of 1999 as well as a
Citizens Research Council of Michigan Memorandum titled “Changes to the Property
Tax Delinquency and Reversion Process in Michigan.”

151

The new process was also to be simpler. The decision was made to reduce the
number of complicated tradeoffs and the number of hands involved in the process. To
accomplish this, the new reform would eliminate the county lien sale. The sale served a
useful purpose in 1896 when the General Property Tax Act was first drafted and
Michigan’s economy was chiefly agricultural. It did give an infusion of cash to local
treasuries in the first part of the 20th century. However, with the creation of county
delinquent tax revolving funds in the 19705, the lien buyer’s role became obsolete. It was
not even needed to reimburse the revolving funds, as collected interest and penalties took
care of that. The new system would also allow the county treasurers to administer the
entire process, including the title work and sale of the property—tasks that had heretofore
been handled by the state Department of Treasury and the Department of Natural
Resources. Fewer hands involved in the process would make it easier for taxpayers to
know how to redeem their debt and preserve their ownership rights. It would also leave
fewer opportunities for unscrupulous people to take advantage of others.

Finally, steps would be taken to insure that the process led to a more certain
result. Over the course of the second year, collecting agents would perform a complete
title search and send a series of notices to the property and all discovered interests. They
would also place a notice in the local newspaper, and even visit the property serving
personal notice on the occupants. If these attempts to collect the delinquent taxes went
unanswered, the collecting agent would file a petition with the circuit court seeking
foreclosure. This provided much needed oversight and also won the support of the title
insurance industry. As long as a judge was convinced that every effort was made to

collect the debt and all interested parties received notice and had an opportunity to be

152

heard, he or she would order foreclosure and issue a quiet title. All prior interests in the
property and all other encumbrances other than utility rights of way and special
assessments were canceled. The new owners would be ready to restore the property to
productive use immediately.

Coupled with the new tax reversion process was a statewide urban homestead
program. ’07 This would be entirely new to Michigan. The program can be administered
either by a local non-profit agency or by a department inside the municipal government.
Whoever administers the program is responsible for screening eligible families and
monitoring their progress during the homestead period. Eligibility requirements called
for families to be below median income, have at least one adult family member
employed, and all children in the household attending school. The head of the household
also must have no felony convictions for the previous five years and demonstrate that he
or she is drug free. ”’8 Once an eligible family is coupled with an available house, the
homestead period begins. The family must continue to meet all eligibility requirements,
perform all necessary repairs to the satisfaction of the administrator, and pay a modest
rent determined by the administrator for five years. The rent is used to pay administrative
costs of the program and is also pooled with other money to create a loan fund out of

109

which homesteaders may borrow to aid in their repairs. At the end of the homestead

 

"’7 This summary is based on a reading of PA127 of 1999, which created the new

program, along with testimony before the Senate Committee on Economic Development
and Regulatory Affairs on March 2, 1999.

’08 These requirements were by far the most contentious of the entire package. This was
particularly evident in the debates in committee and on the floor of the Michigan
legislature. Some members took offense to the requirements; others wanted them to be
even tougher. In the end, a compromise was reached and only one Senator appears to
have opposed the legislation based on the requirements.

“’9 The interest rate on these loans is capped, not to exceed the rate for Federal Housing
Administration home improvement loans under Title I of the National Housing Act.

153

period, the family takes clear title to the house for the cost of one dollar. The family is
free to continue living in the house, or it may sell the house at any time following
transfer, retaining the entire resale profit (under the assumption that whatever value exists
in the house was created by the family).
From Social Control to Social Production.

The politics of social control thwarted previous attempts at tax reversion

reform.l ’0

Legislative records reveal that in every case the approach was similar: A
proposal was offered and interest groups would form coalitions either supporting or
opposing the plan. The principal stakeholders would be the Michigan Association of
County Treasurers on one side and the Michigan Tax Certificate Association (an
organization of people who purchase tax liens at the county sales) on the other side. The
Treasurers would argue that the county lien sale was obsolete and brought unnecessary
administrative burdens. The Tax Certificate Association would retort that they did a
better job collecting debt than treasurers did. They also cast themselves as family
businesses and argued that the service they provided was similar to privatization—which
appealed especially to the Republicans. There was no serious discussion of shortening
the process or of correcting the title problems, and so when community groups,

affordable housing advocates and good government organizations tried to weigh in, there

was little room for their voices. In the end, government, in the form of the legislative

 

”0 In 1990 the Michigan House considered a bill (I-IB4670) that would have slightly
shortened the process. In 1993 the legislature enacted a measure designed to accelerate
the foreclosure of abandoned residential property, but it required that all taxing units
forego reimbursement from the county revolving fiind, therefore it has never been used.
In 1997 three bills were introduced related to tax reversion: HBS353, HB5354, and
SB791. According to Scott Schrager, the Senior Legislative Director for the Michigan
Municipal League and a former staff member of the Michigan House, the issue of tax
reversion was also taken up several times in the 703 and 803 all without consequence.

154

committee, would choose the winners and losers, and every time it chose to preserve the
status quo.

The 1999 proposal was different. The issue was framed much more broadly, and
therefore a greater variety of interest groups entered the debate. Yet, this introduced new
challenges as each interest group weighed in with particular concerns. The Michigan
Association of Realtors and the Michigan Home Builders expressed fear that property
rights might be trampled in the rush to foreclose on delinquent owners. Anti-poverty
groups such as the Michigan Poverty Law Center and Michigan Legal Services worried
that shortening the process might jeopardize the tenancy of low-income homeowners and
displace renters whose landlords were delinquent. The Michigan Association of County
Treasurers along with the Michigan Association of Counties feared that they would incur
greater liability as their role in the process increased. They also noted that the improved
title search, notification, and hearing requirements would be costly and cited the Headlee
Amendment to the Michigan Constitution, which forbade the state from imposing

”1 Members of the private sector,

unfirnded mandates on local units of government.
specifically the Michigan Tax Certificate Association argued furiously that the new
legislation would eliminate their livelihood and drive business out of Michigan, turning a
private sector function over to bigger government. Finally, the Michigan Environmental
Action Council called for caution noting that a fair amount of abandoned commercial and
industrial property suffered from contamination. The fear was that releasing it to a new

owner without a plan for cleanup would hasten another wave of abandonment.

Attempting to draft legislation that addressed each of these concerns would not be easy.

 

1” Michigan Constitution, Article IX, Section 25.

155

Faced with competing interests, the managers of the issue faced two options: They could
revert to the politics of social control, or they could engage in the politics of social
production.

The most important decision facilitating social production came prior to any
legislative action. In October 1997 the Engler administration and state Senator Bill
Schuette invited the Hudson Institute, a national think tank, to help develop an urban
homeownership strategy. Hudson Institute would begin by conducting a year long study
of the issue. Members of the Hudson team would also assist in drafting the legislation
and play an active role in the ensuing debates. This is significant, for as regime theorists
argue, social production requires that the policy process stimulate civic engagement by
getting a greater diversity of interests involved. To this end, Stone notes that “an
institutionalized policy research capacity independent of the governing coalition” can be
quite useful (Stone, 1989, 149). While Hudson Institute was an invited guest to the
proceedings, it was entirely funded by private dollars, giving it the needed independence.

During the study phase, members of the Hudson Institute research team met with
people in several of Michigan’s core cities. They met with elected officials and local
administrators, hearing first hand about the policy challenges to homeownership and
neighborhood redevelopment. They also spoke with business leaders where they learned
of the burden tax reversion imposed for land assembly. Finally, they toured
neighborhoods and spoke with civic organizations and families about the devastating
effect abandoned houses have on property values, not to mention morale. Through such
extensive contact, the Hudson Institute researchers identified many interests who had not

been part of the process in the past. This proved very useful during the policy framing

156

phase as it encouraged all involved to understand the issue in broader terms than it had
been before. For the first time, tax reversion would not simply be about collecting
revenue, but rather it would be connected to the larger problem of abandoned property,
land assembly, and urban blight.

Ultimately this allowed Hudson Institute to keep the debate moving in a
productive direction. Many groups had met individually with Hudson Institute, but few
had spoken directly to each other. During markup sessions and committee hearings the
legislature relied on Hudson Institute to act as a conduit, bringing groups together and
fostering a cooperative atmosphere. When disagreements arose, they gave top priority to
getting the interests to talk with each other. In some cases this helped to shape
preferences—led to compromises that settled the disagreement. 1 ’2 Those concerned with
the rights of both property owners and poor families realized that the dangers were far
greater under the old system than the new system. Both agreed in the end that the key to
protecting families, wealthy and poor alike, is not giving them a long time to pay the debt

(and in turn accrue interest) but rather to make the system as accessible as possible.113 In

 

”2 In this sense the interest groups represented various facets of public opinion which
were refined through civil debate. What emerged from the process was not everything
the majority might initially have wanted, but everything that did emerge was acceptable
to a substantial majority and not destructive to the minority. This seems to be what the
founders had in mind. It is also what interests researchers in the area of deliberative
democracy. On this point see especially Bessette, 1980. For a recent discussion of the
idea that this system leads to policy outcomes that are seldom outstanding but generally
acceptable see Mueller, 1999.

”3 As evidence that a shorter process was not incompatible with a fair process, it was
noted that under the new legislation the owner of a parcel facing foreclosure for a $1,000
tax debt would need only pay $1,365 to avoid foreclosure whereas he or she would have
to pay more than $2,100 under the unreforrned system. It was also discovered that
existing law (M.C.L. 211.7u) allowed taxing authorities to reduce or even waive property
taxes in cases of extreme hardship. All parties agreed that it would be better to use this
option than to slow down the collection process for all delinquent parcels for the sake of a
few hardship cases.

157

 

other cases, where a change in the legislation could not be avoided, Hudson Institute
helped to make the change in a way that satisfied the concerned interest, remained
consistent with the policy objectives, and did not give way to new concerns from another
interest. This required a great deal of communication, and an even greater deal of
subtlety, but in the end organizations that had been fierce opponents in the past found
themselves working toward a common goal.

At all times it was paramount that the debate not decay into a quarrel over
efficiency versus equality. Hudson Institute and the legislative sponsors worked to keep
the two concepts linked. They argued that treasurers would be able to collect taxes more
efficiently, but also that getting property back into productive use was the most efficient
way to have it produce tax revenue again. At the same time, they reminded local activists
that legislation provides neighborhood leaders and local development officials a new tool
to preserve value in distressed areas and promote homeownership among people who
have been traditionally left out of the American dream. In this regard, the legislation will
improve the living conditions of those most in need—that is, it would promote equality.
Real estate organizations were quick to note that this also stimulated the marketability of
urban neighborhoods, making more business for their members. Finally, those who
feared that ending the county lien sales would destroy business opportunity were
disproved: In fact, investment in tax debt was still possible through the purchase of
delinquent tax anticipation notes, issued by each of the counties every year, paying a
generous rate, and backed by the full faith and credit of the government. Furthermore,
investors were still free to approach individual taxpayers with an offer to extend personal

credit to cover tax debt. Finally, as the legislation was coming up for a committee vote,

158

there was evidence that the reformed system would actually stimulate new business as
vendors offered services to counties to assist in the title work and notification process
required for due diligence. By the time the legislation arrived on the floor of the House
and Senate, it was nearly impossible to find anyone who did not agree that the hazards
were greater under the unreforrned law than they would be under the new version.

The shift from social control to social production was successful. By the end of
the committee hearings every group that had been involved in the process with the
exception of the lien buyers had endorsed the legislation. This translated to legislative
success. The main tax reversion bill passed the House on June 1, 1999 by a margin of
101-7. It unanimously passed the Senate on June 9, 1999. The primary urban homestead
bill passed the House on June 10, 1999 with an 82-17 vote, and it passed the Senate on
June 9, 1999 with only one dissenting vote. In the end consensus emerged because the
legislation followed the strategy Arthur Okun outlined but then neglected: it ties upper
marginal growth to lower marginal growth in that wealthy developers who want access to
land for major projects became advocates for a process that also enhances neighborhood
redevelopment along the way—this is the true idea of creating a floor without a ceiling.

Conclusion

By applying the lessons of regime theory and engaging in social production, the
Michigan Urban Homestead Act could serve (as the starting point for future cooperation
in the state. Likewise, it serves as an example for future policy making in state houses
across the country. This will be particularly useful as the states assume greater
responsibility for their destiny in the era of devolution. However, this case study

suggests a few points future researchers should bear in mind: First, social production is

159

not the most expedient way to make policy. The Michigan Urban Homestead Act took
nearly three years from its initial conceptualization to the day Governor Engler signed the
legislation. Second, social production is not a guaranteed solution. As the case study
illustrates, the process is fragile and constantly subject to breakdown. Success requires
that whoever manages the process act with delicacy, a sense of timing, leadership, and
patience. One ought to have a keen sense of economics and politics, but also of human
nature more generally.

What weighs heavily in favor of regime theory is the fact that it fits well into the
liberal origins of the republic. As we saw in the Michigan example, there was no attempt
to change human nature by making people act on anything other than self-interest.
However, regime theory takes on a more sophisticated understanding of self-interest. It
realizes that self-interest can be narrow or broad, depending on the context. When
political interests are threatened and pit against each other as they have been under the
social control model, they have a tendency to be sharper: people tend to look out for
themselves in a narrow or immediate sense. They engage in self-preservationist
behavior. On the other hand, when placed in a less adversarial forum, it is possible,
through civic engagement and democratic discourse to have groups recognize mutual
interests—which are broader and more long term. Consequently, interests let down their
defenses slightly and find ways to cooperate. In sum, regime theory encourages exactly
what Alexis de Tocqueville had in mind when he spoke of self-interest properly
understood.

In the end, a shift away from social control and toward social production might

not change the fact that we are more likely to see non-cooperation than cooperation, but it

160

does suggest that we might increase the likelihood of bringing about cooperation. This is
most likely to happen if future research attempts to ground regime theory even more
directly in a study of human nature—preferably one that takes into account the normative

framework of the liberal regime and the nature of the city in a commercial republic.

161

 

CHAPTER SIX

Anatomy of the Crisis:
The Consequences of Urban America’s Departure from Liberalism

We have seen so far that systematic bias poses the ultimate threat of instability,
or, to a lesser degree, it poses the danger that policy will be less effective in solving the
problem it was designed to address. From James Madison we have learned the
importance of managing self-interest so that stable liberal politics is possible. This, we
saw, requires two important conditions: self-interest must be broad rather than narrow
and citizens must interact in a cohesive, diverse public forum. From Locke we learned
that the best way to keep self-interest broad is to extend people’s horizon of security,
which is best accomplished through liberal property laws. Liberal pr0perty laws allow
people to unlock the productive capacity of the earth, which increases both the quantity
of goods as well as the quality of goods. Even if these goods are not equally distributed,
the very existence of property and the commercial economy will create external goods
that spill over to benefit everyone. This requires careful and very subtle management so
that extemalities are maximized. These ideas serve as the normative foundation of the
liberal regime.

Unfortunately, we have also seen that over time, we have departed from the ideas
of the liberal regime. Pragmatism introduced new ideas into American culture. Ideas
have consequences, and in the case of Pragmatism, the ideas resulted in a new strategy
for politics—a strategy not merely described, but also prescribed by pluralism. Because
politics matters, the politics of pluralism, rooted in ideas that are rival to liberalism

resulted in a politics that is hostile to liberalism. In urban America we see the departure

162

from the liberal foundation when we consider the changes in institutional design that
followed the Progressive Movement as well as the policies these institutions embraced.
Bosses and Bureaucrats: A Reconsideration of Urban Institutions.

With successive waves of immigration, the American population rose late in the
Nineteenth Century and shifted away from the farm and toward the city. The influx of
people, many of whom did not speak English, and few of whom had experience with
participatory democracy, gave rise to the need for an intermediary institution. This
marked the birth of the machine.

The machine was not only an intermediary between the people and government,
but also between the market and government. Thus, the machine was able to coordinate
what each part of the city had to offer with what each needed in return: The people
needed jobs and services. In return they offered the votes needed to gain and maintain
office. The market needed assistance gaining public contracts and accommodations such
as licenses and permits. In return it had money to offer. Politicians needed both the
people’s votes and the market’s money. In return they were able to award public
contracts and place people in thousands of city jobs. However, each facet of the city had
to work through the machine to get what it needed. By preventing citizens, politicians,
and businesses from directly exchanging goods and services, the machine placed itself in
a powerful position.

The machine has had its critics since its inception. It continues to have critics
today. Still, this peculiar institution is not without its defenders, who note that the
machine served a beneficial function by helping to integrate the diverse citizenry into a

common system. The machine existed for a very narrow purpose: maintaining political

163

stability and turning money and votes into power. Since at least the second of these goals
could be achieved by any number of means, some of them respecting natural right and
some of them not respecting natural right, the machine is ultimately in fundamental
tension with the Madisonian idea of liberalism. However, the bosses and ward operatives
took such a very broad view of how best to accomplish the first part of their mission,
maintaining political stability, that even though it was probably the secondary of the
goals (or more properly, it was seen as a necessity for maintaining power) the machine
did ultimately attempt to serve the needs of nearly everyone in the city (even if
unequally). That is, bosses took a broad view of the best way of accomplishing their
narrow mission. In this regard, the machine was at least inadvertently likely to make
policy decisions that appear Madisonian.

Nevertheless, steeped in the reductionist logic of pragmatism, some came to see
the machine as the source of urban social problems. Reformers attributed poverty, crime,
and even problems such as alcoholism on inefficiency—and they blamed the inefficiency
on the political machine. Reformers argued that contracts were awarded based on bribes
to the machine rather than the quality of a company’s work or its ability to deliver goods
and services on time and under budget. Reformers also argued that city jobs were based
on rewards for loyal voters and their families, meaning that people were placed without
regard for competence. In sum, the reformers concluded that the machine’s corruption
and its willingness to allocate resources based on political reward and punishment
inhibited the city’s ability to deliver quality services and respond to citizens’ problems.
As a corrective, reformers believed that the relationship that gave the machine its power

should be dismantled: politics should be separated from administration. For this reason,

164

reformers sought to change the way the city operated administratively, but in order to
accomplish this, it had to change the way the city operated politically and institutionally.

Reformers had an ambitious agenda. First, they initiated ballot reform, insisting
that candidates be selected through open primaries rather than back room deals. Second,
they sought to eliminate the use of public jobs as patronage. Reformers insisted that the
key to separating administration from politics was a professional bureaucracy, where
personnel were hired based on merit and placed in offices based on their particular skills
and areas of expertise. The professional bureaucracy would then address problems with
efficiency, allocating the city’s resources based on economic analysis rather than political
expedience. The city, in short, would be run like a business. lnstitutionally they
recommended the manager over the mayor who, like any chief executive officer, would
be held accountable to the “shareholders” in the electorate.

In retrospect, we might cast blame on the Reform Movement for introducing the
idea of "responsive" government in the first place. Reading the Federalist Papers, it does
not appear that the founders intended that government be responsive in the direct and
literal sense. Indeed, with some qualifications they might have preferred the more
spontaneous responsiveness of the machine to the rigid and formulaic responsiveness of
the reform bureaucracy. If this is true then the very idea of “responsive” government
does damage to the liberal idea and corrupts the moral calculus of liberal citizens. It is
worth noting that with Reform government American politics came to focus not simply
on organized interests but on interest groups. Without the machine to mediate, and with I
a new sense of responsiveness, groups organized more formally than in the past to make

demands on government. Also, interest groups were no longer geographic based—rooted

165

in a particular neighborhood—rather they became identity based—rooted in race or class.
Government, in return, was less able to coordinate those groups in the manner that
machine bosses and captains could. As a result, it abandoned the machine tactics of
subtle control, and took a more direct control, weighing the claims of competing groups
against each other, ultimately choosing the winners and the losers. Thus was born the
conditions that would be institutionalized as pluralist politics. From the regime
perspective, then, neither machine nor reform government has proven adequate for
coalition politics. Consequently, both are examples of the politics of social control. The
main difference is that under machine government the agent of social control is the party
boss and the precinct captain whereas under reform government, the agent of control is
the elected official and the bureaucrat.

Yet the greatest trouble comes when bureaucratic Reform government attempts to
replicate the responsiveness of the machine. The machine, being an informal
organization, was able to appear spontaneous (even if it was in reality very strategic).

The machine was able to use creative tactics to mollify citizens. If citizens required
recreation, the machine could organize a softball tournament. If they required
entertainment, the machine could organize a glee club or community theatre. If there was
a fire, the machine could respond with supplies and emergency shelter faster than the
government by simply calling in favors from local businesses. In short, it was able to
promote problem solving indirectly. The government, being based on principles of
efficiency, and lacking the ability to amuse citizens with bread and circuses, was left to
address problems in a more dangerous way: directly. Because they used using tactics that

sharpened the self-interest of citizens, undermining the conditions necessary for

166

cooperation, government ended up assuming greater responsibility at exactly the wrong
time and in the wrong way. It was left without the benefit of mediating non-
governmental institutions such as the machine, and dealing with a citizenry whose
expectations were greater than ever and ability to compromise weaker than ever.

As a result, government did what any pragmatist would: it divided the large
problems up into smaller, more manageable “issues” and divided the citizens up into
smaller more manageable “client groups”. I ’4 Then it crafted policy that addressed each
narrow issue and appealed to each specific client. This coincides with the development

”5 What remains to

of pluralist models in political science, as discussed in Chapter One.
be seen is the way this form of policy making actually effected the form of the public
sphere. As will be shown below, the policy taken up by the “responsive” government
brought the break with liberalism to completion by weakening the two conditions
Madison considered necessary. That is, Reform government adopted policies that
fractured the public sphere and sharpened citizens’ self-interest. In this regard, the
"urban crisis" as it has come to be called in the literature can best be understood by
examining those policies made as government sought to replace the bread and circuses of
the machine with social policy of its own.

Birds of a Feather: Welfare State and Market Model Redevelopment Programs

Government has taken two general strategies in crafting social policy. First,

under the broad heading of the welfare state, government sought to create a safety net.

 

”4 The machine would never introduce issues into politics. See above, page 136, note
104.

"5 Thus, the elements of pluralism were existent when the model was developed. What
the founders of pluralism did not made clear was the relative novelty of these elements—
and the departure from liberalism that their presence marked.

167

The intention was to establish a minimum standard of living to which every person was
entitled. The logic was to use government power to redistribute wealth, assuming that as
aggregate income grew to a level sufficient to guarantee a decent standard of living, the
conditions of the city would improve. The problem was that the market, left to its own
devices, would not accomplish such a task. For this reason, government raised taxes on
the wealthy, with the intention of spending the money on social programs that would
accomplish redistribution. Second, largely in response to what was perceived as the
failure of the welfare state, government has initiated a set of policies that fall under the
general heading of the market model. The logic holds that the best way to improve
people’s aggregate welfare is to free the market from regulatory policy and tax burdens.
As the economy grows, the benefits will trickle down and improve the living conditions
of the lower half of the wealth distribution. From this perspective, these two policy
directions appear to be in diametric opposition. However, as will be argued, from a
regime perspective, there is very little difference.
The Welfare State

During the era of the welfare state, government sought to address social problems
directly through public policy. Specifically, government developed programs for public
housing, urban renewal, single-family housing, and transportation. Yet the policies
enacted in this era, developed in the piecemeal fashion of pragmatism and enacted
through pluralist strategy suffered in two important ways—two ways not immediately
apparent if we simply analyze the economics of the program, but more obvious from the
regime perspective. First, by narrowly targeting specific client groups, and by directly

seeking to regulate property, the policies had the effect of narrowing self-interest.

168

Second, parts of the program ended up undemrining other parts of the program. The two
problems are related: The reason is that while the welfare state initially seems to be a set
of policies intended specifically for the poor, resistance to these policies prompted those
in control to redesign the program so that it offered something for everyone. In doing so,
certain aspects of the program ended up undermining the intentions of other aspects.

Government's experiment with public housing began with the Housing Act of
1938. This was the part of the welfare state most explicitly aimed at the poor. The idea
was to offer a safe, affordable alternative to the slums and tenements that activists
sympathetic to the Progressive Movement had called to the nation’s attention. I '6 This
housing of last resort, as it was considered, was also intended to be a temporary place
where families would stay only long enough to establish themselves economically. Once
established, they would vacate the project, move into market rate housing, and leave
behind the public housing unit for the next family in need.

However, there were several problems not accounted for in the original design of
public housing programs. First, they did not account for the work disincentive caused by
the fear that a family might too quickly make too much money to qualify for public
housing, but not yet make enough to afford market rate housing. Second, they did not
account for the negative impact on surrounding neighborhoods. Homeowners in nearby
areas feared that if a public housing project were located too close, it would adversely
affect their own property value. That is, out of fear for their property—the source of a

person’s security—many families took up the cause of “Not In My Backyard” or

 

”6 The most powerful account of tenement life is Jacob A. Riis’s photographic essays
How the Other Half Lives (1971) originally published in 1890, near the beginning of the
Reform Movement and almost 40 years before the Housing Act of 1938.

169

NIMBYism. Finally, they did not account for the social damage created simply by
concentrating poverty and segregating it from the rest of the city.

As suggested above, it would be in error to assume the welfare state meant
welfare exclusively for the poor. The rich had a welfare program of their own. This was
the force behind urban renewal. Redevelopment of the city was encumbered by the
difficulty in assembling the requisite amount of land for a large development and also by
the cost of land clearance—not to mention the higher tax on the property. Newly
developing suburbs offered open space and low taxes. Thus, the cost of construction in
the city compared to the cost of construction in the suburb made it unlikely that new
development would occur in the city. If cities were to compete with their surrounding
suburbs, something had to be done.

Under the Renewal program the federal government appropriated firnds to local
renewal corporations (established by state enabling legislation). Initial funds were used
to aid in land acquisition through the power of eminent domain and site clearing. Then
state, local, and private resources were to be used to redevelop the property. Many
renewal sites were residential areas—often residential areas with high concentrations of
poor and minority residents. Renewal corporations preferred to clear the homes and
replace them with higher rent uses such as commercial property like office high rises.
Yet, renewal assumed that the only reason the city was losing investment was because of
the difficulty in land assembly; it did not consider the negative impact of taxes and
regulatory policy. Nor did it consider the social challenges related to race.
Consequently, it did not alter the political and economic variables that made the suburbs

attractive to investment.

170

 

The net effect of urban renewal was threefold. First, it resulted in a significant
loss of houses in the central city, since many of the units were not replaced. Second, it
helped to continue the economic and racial segregation between city and suburb and also
within the city itself since those who were displaced by renewal went one of two ways: If
they had some assets and could secure a mortgage (often assisted by the federal
government as discussed below) they moved out of the city. If they had no assets, they
ended up in public housing. Also, urban renewal effected the city in a startling way: after
clearing large tracts of land, but failing to attract new development, urban renewal helped
to send business and industry to the suburbs and leave huge fields of disinvestment in the
central city. Finally, this massive seizure of private property likely created grave
insecurity among residents—which, if the analysis of Locke in Chapter Three is correct,
means the policy reduced citizens’ horizon of security and narrowed their self-interest; it
gave them reason to take a defensive posture, seeing govemment—and in effect each
other—as rivals. Thus, the joint effect of public housing and urban renewal was a
segregation more severe than anything that has existed heretofore.

These programs, taken up by a government intoxicated with reform principles and
pragmatic intentions, come out of the pluralist strategy. They were crafted by a careful
manipulation of interests, in the manner discussed in Chapter Four, such that interests
were pitted against each other, with government choosing winners and losers. This
means that government also assumed the obligation of making side payments to the
losers. In this case, the side payments came in the form of subsidized mortgages through
the Federal Housing Administration (FHA) and public investment in extending

infrastructure into the rural fringes surrounding the cities, most prominently through the

171

interstate system. These side payments had the effect of undermining the goals of the
original programs.

The side payments resulting from urban renewal include new programs in the area
of transportation and single family housing. The new transportation networks—
particularly the system of interstate expressways had three effects. First, they disrupted
many neighborhoods in the central city and continued the assault on private property
begun with urban renewal. Second, they were often used to create buffers between public
housing projects and nearby neighborhoods, thereby firrther segregating the public
housing projects. Finally, the expressways made it much more convenient to move out of
the city for those with the means to do so. At the same time the government crafted two
major policy programs effecting single family housing. First, the government, under the
auspices of the FHA lead the way in the creation of the thirty year mortgage. This spread
the cost of a home over enough time that the monthly payments were manageable to
middle class families. Also, the FHA began insuring mortgages so that banks were more
willing to lend money to families that would otherwise have been considered a bad risk.
However, they were only willing to secure mortgages for houses located in “marketable”
neighborhoods, which excluded neighborhoods with high proportions of minorities and
preferred neighborhoods outside the city altogether (a process called redlining). The
second policy decision was to use the tax code to subsidize homeownership by allowing

families to deduct mortgage interest from their annual income taxes. I ’7 Together these

 

“7 Other areas of tax policy create the incentive to build new houses over the purchase of

previously owned houses. Families can avoid paying a capital gains tax on a home sale
only by reinvesting the proceeds of a sale in the purchase of a house of greater value.

However, the reality of housing markets means that in seeking a house of greater value
people will prefer new construction. This also means they will tend to locate their new

172

programs made it economically viable to leave the city—which people who had
witnessed the divisive politics of renewal and sharpened their self-interest perceiving
greater threats to their private property were now inclined to do. In sum, transportation
and single family housing policy constituted welfare for the middle class. Unlike the
welfare for the rich and poor in the renewal and public housing examples, this program
relocated most of its clients outside the city altogether. It was a public subsidy for the
fragmentation of metropolitan America.

The Market Model.

More recently, urban areas have followed the trend begun at the national level to
attract reinvestment by lowering taxes and easing regulatory burdens. These so-called
market model tools are often seen as dramatic departures from the programs of the
welfare state. Certainly from the point of view of the economist they look different.
More importantly, one who views the city through the lens of pluralism would also see
the market model as a very different approach. After all, such policies appear to benefit a
different category of interests and so it makes sense to conclude that they signify a
different answer to the question of who governs. However, if we examine the specific
policies more closely, and through the lens of regime theory, we reach a more startling
conclusion: There is very little difference in regime terms between the policies of the
welfare state and those of the market model.

One such tool is the use of Tax Increment Financing (TIF). Consider a business
located in the city, with a facility that is inadequate either because it is too small, in

disrepair due to age, or simply lacking in the amenities available in a newer facility. That

 

houses even firrther away from the central city where cheap land is available. Thus, the
capital gains tax creates an incentive for greater urban fragmentation.

173

 

business owner faces a difficult choice: She may reinvest in the existing property by
expanding the facility or making other capital improvements. Or she may relocate her
business to a different facility altogether. The economic calculation bodes poorly for the
inner city because capital improvements will bring reassessment of the property and
higher taxes. On the other hand, the same marginal investment would yield a better
return if she purchased undeveloped land outside the city where property taxes are
generally lower. Tax incriminate financing is designed to overcoming this problem. The
plan allows businesses to recapture the increased tax. 1 1”

Generally, tax increment financing is available only to businesses within a
predetermined district. Businesses outside the TIF district are not eligible to recapture
the incremental increases in taxes due to capital improvements. An added feature is that
TIF districts are governed by a TIF board. Businesses within the TIF district must apply
and be approved by the board before making any improvements eligible for recapture.
Often TIF boards have the authority to sell bonds to finance the improvements. The
fiinds raised through the bond issue are then dispersed to businesses proportionate to their
share of the anticipated TIF rebate over a set number of years. These firnds are then used
to finance the capital improvements. That is, once a business is approved for, say, ten
years of tax increment financing, it may be able to receive its entire subsidy in the form

of a loan guaranteed by the public credit.119

 

”8 Tax increment financing is akin to the more general tax abatement. Abatements,
however, are not used to retain existing business, but to attract new business to the city.
”9 Some states, such as Michigan, also allow the use of TIF for special purposes beyond
capital improvements. A good example is the Brownfield Redevelopment District, which
allows qualified facilities to recapture nearly all of their taxes provided the money is used
to clean up a contaminated site.

174

This is a less noticeable way of accomplishing what may be less politically
tenable had the property owner paid the full value of her tax and then received a direct
subsidy from the city as a general appropriation. However, if understood from this
perspective, the reality is more clear: the foregone tax revenue is competing with other
public expenditures for such goods as police and fire service, infrastructure maintenance
and repair, and public health. Consequently, the cost of these services is shifted to
residents, thereby driving up the cost of living in the city relative to the suburbs.

The hallmark of the market model is the enterprise zone. There are various
programs that operate on the logic of the enterprise zone, including the federally run
Empowerment Zone/Enterprise Community (EZ/EC) program and various state run
programs such as Michigan’s Renaissance Zone program. In this program both
businesses and residents of designated portions of the city receive abatements on nearly
all state and local taxes. The assumption is that by lowering the marginal cost of living
and doing business these portions of the city will be able to compete with the suburbs for
residents and entrepreneurs.

Analyses of these programs are mixed. Some suggest that they are attracting new
businesses resulting in thousands of jobs that would otherwise be located in the suburbs
and beyond the reach of inner city residents. Others are more critical, arguing that the
businesses that locate inside an enterprise zone simply come from areas within the city
but outside the zone. Thus, the zone does not really lead to new business, but rather it
merely invites a relocating of existing business. Consequently, there is very little net
increase in jobs or capital as a result of the subsidies. Furthermore, the programs do little

to prevent the greater problem that because the owners generally do not reside in the city,

175

the actual profit these businesses generate still ends up beyond the city limits. This is the
situation warned against based on the analysis of Locke: Too little regulation in the
market allows the wealthy to isolate themselves economically and shut off the flow of
beneficial extemalities to the greater community. In the meantime, businesses continue
to use city infrastructure and require services such as police and fire protection, while
paying less in taxes. Because the services still must be paid for, the effect is similar to
that seen in the Tax Increment Financing scheme: it shifts the burden to residents, who
are least equipped to foot the bill.

Another market tactic is privatization either through direct effort such as a transit
system or less direct through putting certain services up for competitive bid and
subjecting the contract to periodic renewal, such as a city garbage collection service. ’20
The benefit is that it lowers the aggregate cost of the service. The problem with
privatization is that it creates a fee for service economy. This eliminates the marginal
discount for scale afforded to public services, thus raising the marginal costs to each
consumer.121 This also announces to the public that certain services are no longer
considered fiindamental and will only be available to those who can afford the higher

cost. The logic therefore must assume that the privatized service exclusively benefits

each particular user—that is, a person’s use of that service benefits him alone, and his

 

’20 See Goldsmith and Norquist.

:21 Consider two scenarios for a city of 1,000,000 residents: In the first, the public
purchases a service with tax dollars. The service costs $1,000,000 per year, and is
available to all residents, translating to a marginal cost of one dollar per resident per year.
In the second scenario, the service is privatized, and therefore available on a fee for
service basis only. The privatized service costs $500,000 per year, but now only 100,000
residents are able to pay for it, translating to a marginal cost of five dollars per user per
year. In the aggregate, the cost is lower in the privatized scenario, but in terms of
marginal cost, it is five times more expensive and beyond the means of most citizens.

I76

inability to get that service harms him alone, so there is no public damage if the poor go
without the service. This becomes deeply flawed when applied to services such as
garbage collection. If one neighbor refirses to purchase a trash removal service, the
negative effects on sanitation, the environment, and aesthetics will spill over and damage
the neighbor who does purchase such a service.

Closely related to the concept of privatization is the quasi-privatized idea of the
Business Improvement District (BID). The BID exists to allow a group of businesses
within a defined area to assess extra taxes on themselves for the purpose of purchasing
additional services beyond those offered by the city. 122 These include hiring custodial
services to empty litter receptacles and sweep the walkways more frequently than
municipal workers, purchasing additional streetlights (or even more decorative fixtures
such as gas lights) to augment the lighting supplied by the city, and even contracting with
private security to patrol the BID as an augmentation to the municipal police. The
willingness to pay for the extra services appears benign enough, but the problem is that
they are only willing to pay for services as long as the benefits are restricted to
themselves. This defeats the very idea of a public. It creates privileged enclaves within
the city that essentially buy their way out of the public at large, leaving the rest of the city
to settle for the mediocre services available to them. Since the businesses that form BIDS
are often the most profitable in the city, they would pay the bulk of a general assessment

to improve services in the city as a whole. Therefore, the BID is divisive as it allows a

 

122 The most popular type of BID is the Principle Shopping District (PSD). However, in
most enabling legislation, a city is allowed to designate only one area as a PSD.
Therefore if any other areas within the city wish to take advantage of the same
opportunity, they must form the more generic BID.

177

group of elites to agree to almost the same increase, but only on the condition that the
money benefit them exclusively and not the city as a whole.

These programs all share in common that they continue to fragment the city,
either by subsidizing the exodus which leads to suburbanization—the development of
numerous competing municipalities—or by marking off certain particular areas of the
city and treating them different with regard to policy. There is little difference between
the FHA’s use of redlining to declare certain neighborhoods unmarketable, urban
renewal’s declaring certain business districts within a city unmarketable, or the enterprise
zone’s similar treatment of both residential and commercial areas simultaneously. These
programs also share in common that they too directly tamper with private property. As
we saw in Chapters Three and Four, property must be regulated carefully, for too direct a
control will invite resistance. Two undesirable conditions result: restricting access to the
market for some (so that they do not see the benefit of a property-based society) or
allowing others to horde up property without the important stipulation that they not
isolate themselves from the rest of society (which is too often the result of laissez-faire
treatment). The result is the same: the self interest of both rich and poor is narrowed
which, as we saw in the discussion of Madison, renders regime type cooperation unlikely
if not impossible. Couple the fact that imprudent policy (or policy that was made through
an imprudent process) has sharpened citizens’ self-interest with the fact that
fragmentation has turned what was once a common, diverse public sphere into numerous,
more homogenous sub-spheres, and we experience the condition Tocqueville warned
against: Citizens have come to see their well being as independent of the welfare of

others. The critical point is that this moral condition did not develop independently: it

178

was in large part the unintended result of policy decisions made over the past fifty
years—policy decisions reached through a process that was shifted away from the
original normative foundation and set atop a different foundation. In this sense,
resistance to policy objectives stems from a failure to preserve the liberal principles upon
which the regime was founded. Urban crisis, then, is not simply economic or political in
nature, but rather it is moral in nature.
Conclusion

In the course of this study, several lessons have revealed themselves. One is that
the first attempt by “responsive” government resulted in policy that was too direct and
too heavy handed. This had the effect of narrowing self-interest and encouraging
isolationist behavior. The second attempt by “responsive” government was not strong
enough. It allows the wealthy to benefit without creating extemalities that improve the
conditions of the poor. In a sense, we have missed the mark on each side of the approach
demanded by liberalism. What is needed then is a policy approach that steers the course
between the Scylla and Charybdis. The relatively successfirl Michigan Urban Policy
Initiative, described in Chapter Five, set against the more troubling redevelopment
programs outlined above, helps to instruct us in the way to steer such a course.

However, this is a provisional conclusion, based on only one case. What is needed
now is more cases where regime principles are deliberately used to craft policy. It must
be noted, of course, that the strategy worked in the case of the Michigan Urban Policy
Initiative primarily because it was so subtle. The most important lesson of this entire

study could be that too direct an attempt to control or to force what should be

179

 

 

spontaneous would be problematic and would likely invite resistance. In sum, liberalism
seems to work best as a normative foundation at the level of the sublime.

The best thing that can be done is to educate future policy makers in the tradition
of liberalism—and teach the strategic model offered by regime theory as rival to that
offered by pluralism. As people come to recognize the dangers of fragmentation,
systematic bias, and ultimately the threat they pose to the legitimacy of a regime that fails
to secure the natural rights of its citizens, they may shrug off the seductive, but
poisonous, expedience offered by pragmatism. They may move to restore wholeness to
the city and thereby restore diversity in the sense it was recommended by Madison.
Ultimately, they may take the very steps needed to reduce systematic bias in urban
America.

The problem is that restoration requires an acceptance that it comes with risk.
Because cities can be made more whole, but not perfectly whole, and systematic bias can
be reduced, but not eliminated, one should not enter into the task of restoration with
utopian ideations. Liberalism means that there is freedom to make choices that are
conducive to regime stability, but it also means freedom to make choices that are
detrimental to regime stability. Thus, with a restoration to liberalism comes a restoration
to the experimentalism spoken of favorably in the Federalist Papers. This may seem
unsettling to the generations of Americans currently infected with the ideas of
Pragmatism. However, to shy away from the contingent nature of experimentalism in
favor of control over the outcomes in life is to answer in the negative the great question

of the Federalist asking whether we can institute civil government by reflection and

180

choice. To prefer control is to abandon freedom in favor of the alternative basis of

government: accident and force.

181

BIBLIOGRAPHY

Arendt, Hannah. 1958. The Human Condition. Chicago: University of Chicago Press.

Arrow, Kenneth. 1951. Social Choice and Individual Values. New Haven: Yale
University Press.

Axelrod, Robert. 1984. The Evolution of Cooperation. New York: Basic Books.

Bachrach, P. and MS. Baratz. 1962. “Two Faces of Power.” American Political Science
Review, 56 (4): 947-52.

Bardach, Eugene. 1977. The Implementation Game: What Happens After a Bill Becomes
a Law. Cambridge, MA: MIT Press.

Banfield, Edward C. 1991. “Economic Analysis of Political Problems.” In Here the
People Rule: Selected Essays. Second Edition. Washington DC: American
Enterprise Institute.

. 1980. “Policy Science as Metaphysical Madness.” In Bureaucrats, Policy
Analysts, Statesmen: Who Leads? Edited by Robert A. Goldwin. Washington,
DC: American Enterprise Institute.

. 1973. The City and the Revolutionary Tradition. In America ’s Continuing
Revolution. Edited by Stephen Tonsor. Washington, DC: American Enterprise
Intsisute.

Banfield, Edward C. and James Q. Wilson. 1963. City Politics. Cambridge: Harvard
University Press.

Banfield, Edward C. 1990 [1974]. The Unheavenly City Revisited (Reissue). Prospect
Heights, IL: Waveland Press.

. 1991. “Present Orientedness and Crime.” in Here the People Rule: Selected
Essays. Second Edition. Washington, DC: American Enterprise Institute.

Barry, Brian and Russell Hardin. 1982. Rational Man and Irrational Society. Beverly
Hills, CA: Sage.

Beard, Charles. 1986 [1913]. An Economic Interpretation of the Constitution of the
United States. New York: The Free Press.

182

Berry, Jeffrey M., Kent E. Portney, and Ken Thompson. 1991. “The Political Behavior
of Poor People.” in The Urban Underclass. ed. Christopher Jencks and Paul E.
Peterson.

Bessette, Joseph M. 1980. “Deliberative Democracy: The Majority Principle in
Republican Government.” In How Democratic is the Constitution? Eds. Robert
A. Goldwin and William A. Schambra. Washington, DC: American Enterprise
Institute.

Bissinger, Buzz. 1997. A Prayer for the City. New York: Random House.

Black, Duncan. 1958. The Theory of Committees and Elections. Cambridge: Cambridge
University Press.

Bloom, Allan. The Closing of the American Mind. New York: Basic Books.

Bogdan, Albert A. 1997. “The Delinquent Property Tax Collection Process: How to Use
it for Community Redevelopment and Why We Need to Replace it.” Planning
and Zoning News. October 1997: 5-9.

Brooks, David. 2000 Bobos in Paradise. New York: Basic Books.

Citizens Research Council of Michigan. “Delinquent Property Taxes as an Impediment
to Development in Michigan.” Report Number 325, April 1999.

. “Changes in the Property Tax Delinquency and Reversion Process.”
Memorandum #1052, January 2000.

Dahl, Robert A. 1956. A Preface to Democratic Theory. Chicago: University of
Chicago Press.

. 1961. Who Governs? Democracy and Power in an American City. New Haven:
Yale University Press.

. 1982. Dilemmas of Pluralist Democracy. New Haven: Yale University Press.
. 1989. Democracy and Its Critics. New Haven: Yale University Press.

Darden, Joe T. et. al. 1987. Detroit: Race and Uneven Development. Philadelphia:
Temple University Press.

Dewey, John. 1927. The Public and Its Problems. New York: Henry Holt and Company.

. 1935. Liberalism and Social Action. New York: G. P. Putnam’s Sons.

183

Diggins, John Patrick. 1984. The Lost Soul of American Politics: Virtue, Self-Interest,
and the Foundations of Liberalism. New York: Basic Books.

East, John Porter. 1965. Council-Manager Government: The Political Thought of its
Founder, Richard S. Childs. Chapel Hill, NC: University of North Carolina Press.

Elkin, Stephen L. 1987. City and Regime in the American Republic. Chicago:
University of Chicago Press.

Finegold, Kenneth. 1995. Experts and Politicians: Reform Challenges to Machine
Politics in New York, Cleveland, and Chicago. Princeton: Princeton University
Press.

Fishman, Robert. 1987. Bourgeois Utopias: The Rise and Fall of Suburbia. New York:
Basic Books.

Garreau, Joel. 1991. Edge City: Life on the New Frontier. New York: Doubleday.

Glazer, Nathan. 1988. The Limits of Social Policy. Cambridge: Harvard University
Press.

Goldsmith, Stephen. 1997. The Twenty-First Century City: Resurrecting Urban
America. Washington, DC: Regnery Press.

Goldwin, Robert A. 1987. “John Locke.” in The History of Political Philosophy. Third
Edition. ed. Leo Strauss and Joseph Cropsey.

Green, Donald P. and Ian Shapiro. 1994. Pathologies of Rational Choice Theory: A
Critique of Applications in Political Science. New Haven: Yale University Press.

Habermas, JUrgen. 1991. The Structural Transformation of the Public Sphere: An
Inquiry into a Category of Bourgeois Society. Tr. Thomas Burger. Cambridge:
MIT Press.

Hamilton, Alexander, John Jay, and James Madison. 1937 [1788]. The Federalist, ed.
Edward Mead Earle. New York: The Modern Library.

Harding, Alan. 1995. “Elite Theory and Grth Machines.” In David Judje, Gerry
Stoker, and Harold Wolman (eds) Theories of Urban Politics. Thousand Oaks,
CA: Sage.

Harrington, Michael. 1997. The Other America: Poverty in the United States. New
York: Simon and Schuster.

Harvey, David. 1973. Social Justice and the City. London: Edward Arnold.

184

. 1989. The Urban Experience. Baltimore: Johns Hopkins University Press.

Herson, Lawrence HR. and John M. Bolland. 1991. The Urban Web: Politics, Policy,
and Theory. Second Edition. Chicago: Nelson-Hall Publishers.

Hobbes, Thomas 1968 [1651]. Leviathan. New York: Penguin.

Horvvitz, Robert. 1987. “John Dewey” in History of Political Philosophy. Third
Edition. Edited by Leo Strauss and Joseph Cropsey. Chicago: University of
Chicago Press.

Hunter, Floyd. 1953. Community Power Structure: A Study of Decision Makers. Chapel
Hill, NC: University of North Carolina Press.

Ingram, Helen, and Anne Schneider. 1989. “Constructing Citizenship: The Subtle
Messages of Policy Design.” In Public Policy for Democracy. Ed. Helen Ingram
and Steven Rathgeb Smith. Washington, DC: Brookings Institution.

Jackson, Kenneth T. 1985. Crabgrass Frontier: The Suburbanization of the United
States. New York: Oxford University Press.

Jacobs, Jane. 1961. The Death and Life of Great American Cities. New York: Random
House.

Jones, Bryan D. and Lynn W. Bachelor. 1993. The Sustaining Hand: Community
Leadership and Corporate Power (2nd ed., rev.) Lawrence, KS: The University
Press of Kansas.

Judd, Dennis R. and Susan S. Fainstein. 1999. The Tourist City. New Haven: Yale
University Press. ~

Judge, David. 1995. “Pluralism.” In Theories of Urban Politics. Ed. David Judge, Gerry
Stoker, and Harold Wolman. Thousand Oaks, CA: Sage Publications.

Katznelson, Ira. 1981. City Trenches: Urban Politics and the Patterning of Class in the
United States. Chicago: University of Chicago Press.

Kelman: Steven. 1987. Making Public Policy: A Hopeful View of American
Government. New York: Basic Books.

Kemmis, Daniel. 1995. The Good City and the Good Life: Renewing the Sense of
Community. New York: Houghton Mifflin.

Lehman, Jeffrey S. 1994. “Updating Urban Policy.” In Sheldon H. Danziger, Gary D.

Sandefur, and Daniel H. Weinberg (eds) Confionting Poverty: Prescriptions for
Change. New York: Russell Sage.

185

Locke, John. 1950. A Letter Concerning T oleration. New York: Macmillan.

. 1960 [1698]. Two Treatises of Government. ed. Peter Laslett. Cambridge:
Cambridge University Press.

. 1975 [1689]. An Essay Concerning Human Understanding. Ed. Peter H.
Nidditch. New York: Oxford University Press.

Long, Norton. 1966. “Local Government and Renewal Policies.” In Urban Renewal:
The Record and the Controversy. Edited by James Q. Wilson. Cambridge, MA:
MIT Press.

Lukes, Steven. 1974. Power: A Radical View. New York: Macmillan.

Macpherson, CB. 1962. The Political Theory of Possessive Individualism: Hobbes to
Locke. New York: Oxford University Press.

Madison, James. 1987a [1785]. “Memorial and Remonstrance Against Religious
Assessments.” in The Founders’ Constitution, Vol. V. eds. Philip B. Kurland
and Ralph Lerner. Indianapolis: Liberty Press. (82-84).

. 1987b [1787]. “Vices of the Political System of the United States.” in The
Founders’ Constitution, Vol. I. eds. Philip B. Kurland and Ralph Lerner.
Indianapolis: Liberty Press. (166-69).

Mansbridge, Jane. 1990. Beyond Self-Interest. Chicago: University of Chicago Press.

Marx, Karl and Friedrich Engels. 1978 [1848]. “Manifesto of the Communist Party.” in
The Marx-Engels Reader, Second Edition. ed. Robert C. Tucker. New York:
Norton.

Massey, Douglas A. and Nancy Denton. 1993. American Apartheid. Cambridge:
Harvard University Press.

Michigan House of Representatives Committee on Urban Policy and Economic
Development. Final Report. Lansing, MI: Michigan House of Representatives.
November 24, 1998.

Montesquieu, Charles de Secondat, baron de. 1989 [1748]. The Spirit of the Laws. New
York: Cambridge University Press.

Mueller, John E. 1999. Capitalism, Democracy and Ralph ’s Pretty Good Grocery.
Princeton: Princeton University Press.

Mumford, Lewis. 1995. “The Ideal Form of the Modern City” In The Lewis Mumford
Reader. Edited by Donald L. Miller.Athens, GA: University of Georgia Press.

186

Murray, Charles. 1994. Losing Ground: American Social Policy, 1950-1980. New
York: Basic Books.

Nichols, James H. 1990. “Pragmatism and the US. Constitution” in Confronting the
Constitution: The Challenge to Locke, Montesquieu, Jefferson, and the
F ederalists From Utilitarianism, Historicism, Marxism, Freudianism,
Pragmatism, Existentialism... Edited by Allan Bloom. Washington, DC:
American Enterprise Institute.

Nivola, Pietro S. 1999. Laws of the Landscape: How Policies Shape Cities in Europe
and America. Washington, DC: Brookings Institution Press.

Okun, Arthur. 1975. Equality and Efficiency: The Big Tradeoff Washington, DC:
Brookings Institution Press.

Olson, Mancur. 1971. The Logic of Collective Action: Public Goods and the Theory of
Groups. Cambridge: Harvard University Press.

Orfield, Myron. 1998. Metropolitics: A Regional Agenda for Community and Stability.
Washington, DC: Brookings Institution Press.

Parenti, Michael. 1980. “The Constitution as an Elitist Document.” In How Democratic
is the Constitution? Eds. Robert A. Goldwin and William A. Schambra.
Washington, DC: American Enterprise Institute.

Peterson, Paul. 1981. City Limits. Chicago: University of Chicago Press.

Piven, Frances Fox and Richard A. Cloward. 1997. The Breaking of the American
Social Compact. New York: The New Press.

Plato. 1984. Apology. In Four Texts on Socrates. Translated by Thomas G. West.
Ithica: Cornell University Press.

. 1968. Republic. Translated and Edited by Allan Bloom. New York: Basic
Books.

Polsby, Nelson W. 1980. Community Power and Political Theory (2nd ed.). New
Haven: Yale University Press.

Pressman, Jeffrey L. and Aaron Wildavsky. 1984. Implementation. Third Edition.
Berkeley: University of California Press.

Putnam, Robert D. 2000. Bowling Alone: The Collapse and Revival of A merican
Community. New York: Simon and Schuster.

187

Reich, Robert B. 1988. “Policy Making in a Democracy.” In The Power of Public
Ideas. Ed. Robert B. Reich. Cambridge: Harvard University Press.

Riker, William H. 1982. Liberalism Against Populism. San Fransisco: Freeman.
. 1986. The Art of Political Manipulation. New Haven: Yale University Press.
Riordin, William L. 1963. Plunkett of Tammany Hall. New York: Penguin.

Rusk, David. 1995. Cities Without Suburbs. 2ed. Washington, DC: Woodrow Wilson
Center Press.

. 1999. Inside Game Outside Game: Winning Strategies. for Saving Urban
America. Washington, DC: Brookings Institution.

Sandel, Michael. 1988. “The Political Theory of the Procedural Republic.” in The
Power of Public Ideas. ed; Robert B. Reich. Cambridge: Harvard University
Press.

. 1996. Democracy ’3 Discontent: America in Search of a Public Philosophy.
Cambridge: Harvard University Press.

Schiesl, Martin J. 1977. The Politics of Efliciency: Municipal Administration and
Reform in America, 1800-1920. Los Angeles: University of California Press.

Sen, Amartya. 1977. “Rational Fools: A Critique of the Behavioral Foundations of
Economic Theory.” in Philosophy and Public Affairs. 6. 317-344.

Shepsle, Kenneth A. and Mark S. Bonchek. 1997. Analyzing Politics: Rationality,
Behavior, and Institutions.

Smith, Kevin T. 1996. “Foreclosure of Real Property Tax Liens.” Michigan Bar
Journal. September 1996: 953-57.

Sreenivasan, Gopal. 1995. The Limits of Lockean Rights in Property. New York:
Oxford University Press.

Stokey, Edith and Richard Zeckhauser. 1978. A Primer for Policy Analysis. New York:
Norton.

Stone, Clarence N. 1989. Regime Politics: Governing Atlanta, 1946-1988. Lawrence,
KS: University Press of Kansas.

. 1999a. “The Dilemmas of Social Reform Revisited: Putting Civic Engagement

in the Picture.” Paper presented at the 1999 American Political Science
Association Annual Meeting.

188

. 1999b. “The Atlanta Experience Re-examined: Toward Refining the Analysis of
Urban Regimes.” Paper presented at the 1999 American Political Science
Association Annual Meeting.

Stone, Deborah. 1997. Policy Paradox: The Art of Political Decision Making. New
York: Norton.

Strauss, Leo. 1953. Natural Right and History. Chicago: University of Chicago Press.

Sugrue, Thomas J. 1996. The Origins of the Urban Crisis: Race and Inequality in
Postwar Detroit. Princeton: Princeton University Press.

Tarcov, Nathan. 1981. “Locke’s Second Treatise and ‘The Best Fence Against
Rebellion. ”’ Review of Politics 43: 198-217.

Teaford, Jon C. 1990. The Rough Road to Renaissance: Urban Revitalization in America,
1940-1985. Baltimore: Johns Hopkins University Press.

Tiebout, Charles M. 1956. “A Pure Theory of Local Expenditures.” Journal of Political
Economy 64, no. 5: 416-24.

Tocqueville, Alexis de. 1966 [1823]. Democracy in America. Translated by George
Lawrence. Edited by J .P. Mayer. New York: Harper and Row.

Tully, James. 1980. A Discourse on Property: John Locke and His A dversaries. New
York: Cambridge University Press.

University of Michigan, School of Public Policy. “Abandoned Commercial Property in
Detroit.” April, 25, 1998.

Warner, Sam Bass. 1972. The Urban Wilderness: A History of the American City.
Berkeley: University of California Press.

Warren, Donald. 1978. The Radical Center: Middle Americans and the Politics of
Alienation. Notre Dame: University of Notre Dame Press.

Weber, Max. 1947. The Theory of Social and Economic Organization. Translated by
AM. Henderson and Talcott Parsons. Edited by Talcott Parsons. New York: The
Free Press.

White, Andrew D. 1998 [1890]. “Cit Affairs Are Not Political,” in The Politics of
Urban America: A Reader. 2n ed. Ed. Dennis R. Judd and Paul P. Kantor.
Boston: Allyn and Bacon.

189

Wilson, James Q. 1989. Bureaucracy: What Government Agencies Do and Why They Do
It. New York: Basic Books.

Wilson, William Julius. 1987. The Truly Disadvantaged: The Inner City, the
Underclass, and Public Policy. Chicago: University of Chicago Press.

Wolfe, Alan. 1998a. Marginalized in the Middle. Chicago: University of Chicago Press.
. 1998b. One Nation, After All. New York: Viking Press.
Wolfe, Tom. 1987. The Bonfire of the Vanities. New York: Bantam Books.

Wolfinger, Raymond E. 1973. The Politics of Progress. Englewood Cliffs, NJ: Prentice
Hall.

Yates, Douglas. 1977. The Ungovernable City: The Politics of Urban Problems and
Policy Making. Cambridge, MA: MIT Press.

Young, Iris Marion. 1990. Justice and the Politics of Difference. Princeton: Princeton
University Press.

190

HA

1111111111111111171‘111111111