Brandon Donnelly
Daily insights for city builders. Published since 2013 by Toronto-based real estate developer Brandon Donnelly.
Brandon Donnelly
Daily insights for city builders. Published since 2013 by Toronto-based real estate developer Brandon Donnelly.
We talk a lot about economic inequality these days. We worry, among other things, that our successful cities are becoming playgrounds for the rich and that housing is becoming increasingly unaffordable for the middle class.
Without negating the importance of things such as attainable housing, I’d like to offer up two, potentially new, perspectives on economic inequality.
The first is an essay by venture capitalist Paul Graham. In it, he rationally unpacks, as he always does, the phenomenon of economic inequality. One of his key points is the distinction between rent seeking degenerate economic inequality and the economic inequality caused by rapid value creation (i.e. Two Stanford students decide to create a new search engine called Google).
“If the rich people in a society got that way by taking wealth from the poor, then you have the degenerate case of economic inequality where the cause of poverty is the same as the cause of wealth. But instances of inequality don’t have to be instances of the degenerate case. If one woodworker makes 5 chairs and another makes none, the second woodworker will have less money, but not because anyone took anything from him.”
Of course, Paul Graham is thinking about this from the perspective of a venture capitalist that funds startups and helps entrepreneurs get rich. But what about the impacts to people who live in a city where the rich are far richer than the poor?
That brings me to the second perspective.
A recent study, published in The Journal of the American Medical Association and written about in the New York Times, has discovered a surprising relationship between income and life expectancy across the United States from 2001 to 2014.
What they found was that cities with high economic inequality – such as New York and San Francisco – actually have lower inequality when it comes to life expectancy.
Here is a chart from the New York Times:
And here is a chart from healthinequality.org:
If you’re rich, it doesn’t matter where you live. The life expectancy of a rich person in New York is roughly the same as a rich person in Detroit. (Though, as to be expected, women generally live longer than men.)
However, as income levels fall, so does life expectancy. But it falls more in a city like Detroit than it does in New York. In fact, rich cities such as New York and San Francisco are almost model cities in this regard. Why is that?
The biggest predictor appears to be health behaviors, such as smoking and obesity:
“The research seems to suggest that living in proximity to the preferences — and tax base — of wealthy neighbors may help improve well-being. New York is not just a city of rich and poor, but also one of walkable sidewalks, a trans-fat ban and one of the most aggressive anti-tobacco agendas of any place in the United States.”
So there you have it. Two, potentially new, ways to think about economic inequality.
In a knowledge and innovation economy, new ideas matter a great deal. But it seems to be a lot easier for existing companies to come up with sustaining, incremental innovations, than it is for them to come up with new, disruptive innovations.
New can be hard.
That’s why I was interested in a recent New York Times article by Wharton professor Adam Grant called, How to Raise a Creative Child. Step One: Back Off.
The article starts by arguing that many “child prodigies” rarely become adult creators who go on to the change the world:
The gifted learn to play magnificent Mozart melodies, but rarely compose their own original scores. They focus their energy on consuming existing scientific knowledge, not producing new insights. They conform to codified rules, rather than inventing their own. Research suggests that the most creative children are the least likely to become the teacher’s pet, and in response, many learn to keep their original ideas to themselves. In the language of the critic William Deresiewicz, they become the excellent sheep.
To become creators Adam argues that children need to be given the freedom and independence to develop their own sense of self:
When psychologists compared America’s most creative architects with a group of highly skilled but unoriginal peers, there was something unique about the parents of the creative architects: “Emphasis was placed on the development of one’s own ethical code.”
Yes, parents encouraged their children to pursue excellence and success — but they also encouraged them to find “joy in work.” Their children had freedom to sort out their own values and discover their own interests. And that set them up to flourish as creative adults.
I firmly believe in this approach. But of course, this doesn’t just apply to children; though that is certainly an important takeaway. I also think that if you want the best work out of people in the workplace, you also need to: back off.
Creativity needs freedom.
We already know that many successful cities are struggling with housing affordability. But what you may not know is that a similar phenomenon is happening in many ski towns. Supply is constrained and demand is high.
Here is an excerpt from a recent New York Times article:
Local officials and housing experts say it is a symptom of widening economic inequality, one that is especially sharply felt in tiny resort towns hemmed in by beautiful but undevelopable public land. While the wealthiest can afford $5 million ski homes and $120-a-day lift tickets, others work two jobs and sleep in shifts to get by.
“It’s so much worse today than it’s ever been,” said Sara Flitner, the mayor of Jackson, Wyo., where the median single-family home price rose 24 percent last year to $1.2 million, according to the Jackson Hole Report.
It’s for reasons like this that some ski towns have strict criteria around who is an eligible resident. For example, Banff, Alberta does this to ensure, “that housing remains available for those whose primary objective is to live and work in the community.”
In small landlocked ski towns – where it’s difficult or almost impossible to increase supply – there are only so many options.
We talk a lot about economic inequality these days. We worry, among other things, that our successful cities are becoming playgrounds for the rich and that housing is becoming increasingly unaffordable for the middle class.
Without negating the importance of things such as attainable housing, I’d like to offer up two, potentially new, perspectives on economic inequality.
The first is an essay by venture capitalist Paul Graham. In it, he rationally unpacks, as he always does, the phenomenon of economic inequality. One of his key points is the distinction between rent seeking degenerate economic inequality and the economic inequality caused by rapid value creation (i.e. Two Stanford students decide to create a new search engine called Google).
“If the rich people in a society got that way by taking wealth from the poor, then you have the degenerate case of economic inequality where the cause of poverty is the same as the cause of wealth. But instances of inequality don’t have to be instances of the degenerate case. If one woodworker makes 5 chairs and another makes none, the second woodworker will have less money, but not because anyone took anything from him.”
Of course, Paul Graham is thinking about this from the perspective of a venture capitalist that funds startups and helps entrepreneurs get rich. But what about the impacts to people who live in a city where the rich are far richer than the poor?
That brings me to the second perspective.
A recent study, published in The Journal of the American Medical Association and written about in the New York Times, has discovered a surprising relationship between income and life expectancy across the United States from 2001 to 2014.
What they found was that cities with high economic inequality – such as New York and San Francisco – actually have lower inequality when it comes to life expectancy.
Here is a chart from the New York Times:
And here is a chart from healthinequality.org:
If you’re rich, it doesn’t matter where you live. The life expectancy of a rich person in New York is roughly the same as a rich person in Detroit. (Though, as to be expected, women generally live longer than men.)
However, as income levels fall, so does life expectancy. But it falls more in a city like Detroit than it does in New York. In fact, rich cities such as New York and San Francisco are almost model cities in this regard. Why is that?
The biggest predictor appears to be health behaviors, such as smoking and obesity:
“The research seems to suggest that living in proximity to the preferences — and tax base — of wealthy neighbors may help improve well-being. New York is not just a city of rich and poor, but also one of walkable sidewalks, a trans-fat ban and one of the most aggressive anti-tobacco agendas of any place in the United States.”
So there you have it. Two, potentially new, ways to think about economic inequality.
In a knowledge and innovation economy, new ideas matter a great deal. But it seems to be a lot easier for existing companies to come up with sustaining, incremental innovations, than it is for them to come up with new, disruptive innovations.
New can be hard.
That’s why I was interested in a recent New York Times article by Wharton professor Adam Grant called, How to Raise a Creative Child. Step One: Back Off.
The article starts by arguing that many “child prodigies” rarely become adult creators who go on to the change the world:
The gifted learn to play magnificent Mozart melodies, but rarely compose their own original scores. They focus their energy on consuming existing scientific knowledge, not producing new insights. They conform to codified rules, rather than inventing their own. Research suggests that the most creative children are the least likely to become the teacher’s pet, and in response, many learn to keep their original ideas to themselves. In the language of the critic William Deresiewicz, they become the excellent sheep.
To become creators Adam argues that children need to be given the freedom and independence to develop their own sense of self:
When psychologists compared America’s most creative architects with a group of highly skilled but unoriginal peers, there was something unique about the parents of the creative architects: “Emphasis was placed on the development of one’s own ethical code.”
Yes, parents encouraged their children to pursue excellence and success — but they also encouraged them to find “joy in work.” Their children had freedom to sort out their own values and discover their own interests. And that set them up to flourish as creative adults.
I firmly believe in this approach. But of course, this doesn’t just apply to children; though that is certainly an important takeaway. I also think that if you want the best work out of people in the workplace, you also need to: back off.
Creativity needs freedom.
We already know that many successful cities are struggling with housing affordability. But what you may not know is that a similar phenomenon is happening in many ski towns. Supply is constrained and demand is high.
Here is an excerpt from a recent New York Times article:
Local officials and housing experts say it is a symptom of widening economic inequality, one that is especially sharply felt in tiny resort towns hemmed in by beautiful but undevelopable public land. While the wealthiest can afford $5 million ski homes and $120-a-day lift tickets, others work two jobs and sleep in shifts to get by.
“It’s so much worse today than it’s ever been,” said Sara Flitner, the mayor of Jackson, Wyo., where the median single-family home price rose 24 percent last year to $1.2 million, according to the Jackson Hole Report.
It’s for reasons like this that some ski towns have strict criteria around who is an eligible resident. For example, Banff, Alberta does this to ensure, “that housing remains available for those whose primary objective is to live and work in the community.”
In small landlocked ski towns – where it’s difficult or almost impossible to increase supply – there are only so many options.
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