“When were you last in Hyde Park? How much are you actually using it? We need to know what it costs us!”
Patrik Schumacher might as well have suggested blowing up the moon when he proposed that Hyde Park in London should be privatized for development.
In a presentation at the World Architecture Festival 2016 in Berlin, Schumacher argued that London’s housing crisis is due to constraints imposed by government policies. In his “Urban Policy Manifesto,” he outlined eight “demands” for radical reductions of regulation and subsidies, and even private ownership of infrastructure and public spaces.
This polemic has predictably catapulted him into controversy, with some applauding his courage while others condemn his callousness, dubbing him “the Trump of architecture.”
But Schumacher is not some alt-right Twitter troll living in his parents basement. He is the Director of Zaha Hadid Architects, a 400-person international design firm that has produced some of the world’s most remarkable buildings of the last three decades, including the Heydar Aliyev Center in Azerbaijan and the London Aquatics Center for the 2012 Olympics. Schumacher was named Director after the untimely death in March 2016 of Dame Zaha Hadid, the groundbreaking Pritzker Prize winner whom Schumacher has worked alongside since 1988.
While he has clearly stated that his political views are his own and do not represent the firm (and the firm’s trustees have emphatically agreed), his position adds gravitas to what might otherwise be easily dismissed by the traditionally left-leaning architectural profession as irrelevant blasphemy.
The Theory of Anarcho-Capitalism
To try to pin Schumacher down on the left-right political spectrum is to misunderstand his stance altogether. He espouses anarcho-capitalism, a political theory that rejects the legitimacy and efficacy of government in solving the problems of society. An anarcho-capitalist may share some of the end goals of both the left and the right, yet disagree with both on the moral and practical means of achieving those ends.
To an anarcho-capitalist, the means of government are the means of force, which Schumacher described as police force, “the power to shut down, clamp down, and put you out.”
Anarcho-capitalism is derived from the “non-aggression principle,” which holds that the initiation of physical force is morally wrong (although defensive force may be justifiable). Unlike any other form of societal organization, the state claims legitimate authority to initiate force against people without their consent. This force is manifested in the threats of attack or imprisonment that compel compliance with taxation, regulation, and military action.
This moral imperative of non-aggression provides sufficient reason to oppose the state regardless of the practical outcomes of such opposition. The ends, however noble, can never justify the means of governmental initiation of force.
However, anarcho-capitalists argue that a truly voluntary market economy could produce greater prosperity at all levels of the economy. Individuals engaging in voluntary trade each gain more perceived value than what they give away.
A market of such transactions establishes prices that inform producers of what, how much, and when to produce certain goods, such as housing. The market becomes a decentralized network of information, allocating scarce resources to satisfy the varied demands of individual consumers.
When governments use confiscated capital to subsidize particular goods and services, artificially inflated prices distort this information, resulting in a wasteful misallocation of resources. Similarly, regulations that obstruct voluntary trade systematically distort prices, creating schisms between supply and demand that can lead to perceived shortages like the London housing shortage.
Anarcho-capitalists argue that removal of governmental distortions to voluntary exchange and production would allow the necessary price corrections to occur. This would promote a more efficient allocation of resources to satisfy the diversity of consumers’ wants and engender greater human flourishing at all levels of the socio-economic spectrum.
Anarcho-capitalism is not a panacea, however. It cannot eliminate scarcity, inequality, hatred, or violence. But nor can any other politico-economic system. What it can eliminate is the legitimacy granted to governments or anyone else who attempts to achieve their ends using the means of the initiation of force.
Patrik Schumacher has taken a bold step to attempt to convince his colleagues and the world that the legitimacy granted to government intervention is unnecessary and unwarranted. It is within this context of anarcho-capitalism that Schumacher’s analysis and demands need to be considered.
He says that, in London, “the key decisions that should be entrepreneurial decisions are fixed politically,” noting arbitrary prescriptions of land use allocation, program elements, density, unit mixes, unit sizes, room sizes, and even balconies. Such over-restrictive regulations result in haggling between developers and planners so that “developers compete solely in terms of gaming the planners” rather than creating unique value.
Anarcho-capitalists reject this conceit of the omniscience of central planners, whether in the economy or the built environment. Information about consumers’ values is diffused among the dynamic network of all market participants, communicated to producers through prices. Those who best anticipate the demands of consumers and efficiently allocate resources are rewarded with profit, and those who do not suffer losses.
When this role of anticipating demand is monopolized by a government central planner with no skin in the game, widespread and enduring misallocations of resources result in oversupply or shortages. Schumacher describes how London’s housing policies have generated an oversupply of middle-income units despite a shortage of overall units.
Schumacher broadens this criticism to the urban fabric:
“You have the pretense of land use planning, where the whole point is that only the market can discover the synergies, the collocational synergies and relevancies of various things tying together into an urban network.”
Anarcho-capitalism enables the kind of idiosyncratic entrepreneurial development that makes urban areas vibrant and unique. Often, what keeps people coming back to a place is not the grandeur of an orchestrated public space, but the individual shops, restaurants, and businesses that have emerged to breathe life into it.
Schumacher’s first four demands – to restrain planners, abolish land use prescriptions, stop attempts at “milieu protection” (forced preservation of the character of a neighborhood), and abolish housing design standards – express this anarcho-capitalist principle that government simply doesn’t know best.
This acknowledges that no individual, even a well-intentioned expert city planner, is able to ascertain the vast amount of time-sensitive information being communicated among all market participants in a diffuse manner.
This does not mean that markets will always get it right. Markets make mistakes. The crucial advantage markets have over controlled economies is that markets can correct their mistakes and make producers accountable for them through profit and loss.
In contrast, state planners do not even know when they have made a mistake. They are a disinterested third party, unaccountable to the producers and consumers who suffer losses from their edicts. Markets can adapt to new information, while the mistakes of central planners can metastasize for decades.
Anarcho-Capitalist Social Housing
Schumacher has received some sympathy for his criticisms of prescriptive planning and design standards. Much more controversial are his proposals for housing low-income individuals.
In his next three demands, Schumacher proposes abolishing all forms of social and affordable housing, home buying subsidies, rent control, and tenancy restrictions.
Arguments that home-buying subsidies artificially inflate home prices and that rent control and tenancy restrictions reduce the supply of rental units are hardly controversial among economists of any stripe. But his call to phase out the public benefit system has been construed as a direct attack on the poor.
What has been missed in these inflammatory news media sound bytes is an important caveat Schumacher stated: to substitute housing benefits “with monetary support without specific purpose allocation.”
In other words, government would still subsidize low-income individuals with the same amount of money, but the recipient would have the choice of spending that money either on their housing or on their other priorities. Like everyone else, they could choose to spend more to live in a central location or to move out of the city center and save money. This presents more options to the recipient and reduces the distortion of housing prices.
Of course, this is no anarcho-capitalist proposal. Is Schumacher conceding that government is still needed to steal from the rich to give to the poor?
Government welfare programs give people a false sense of charity, allowing them to think they do not need to directly contribute to causes they care about because the government is taking care of it. They also waste the efforts of proponents who focus resources on electioneering and lobbying rather than on direct aid and fundraising. Anarcho-capitalism would bring the same efficiencies and value discovery mechanisms to the market for charity as it would to the market for goods and services.
The expectation of a fully-realized anarcho-capitalist society is that it would develop the charitable institutions needed to help those who need it. As Schumacher’s detractors have demonstrated, there is a powerful desire among many to address the needs of the less fortunate, and with more tax dollars left in their pockets, they could be expected to do just that.
In the housing market, charitable organizations could either offer their own housing subsidies or purchase buildings to offer rental units to their preferred tenants at below-market rates. Or, as Schumacher presented, new forms of micro-unit or communal housing could bring market affordability to city centers.
However, this infrastructure of charitable organizations and market solutions would take time to develop. Schumacher’s proposal for unallocated monetary support from the government is an interim compromise. It would serve as a bridge to allow society to transition to a point at which all government functions could be replaced by voluntary institutions.
The Selling of Hyde Park
Perhaps the most outrageous of Schumacher’s demands is his call to “privatise all streets, squares, public spaces and parks, possibly whole urban districts.” In his most enfant terrible moment he suggests that London’s Hyde Park should be privatized, with the possibility of building a new city over 80% of it:
“And even Hyde Park. I mean, there’s historic preservation, I’m not going to be against that in principle, but imagine if we can in 80% of Hyde Park build a new city within the center of London according to the highest bidding value proposition. You can still keep a nice 20%. And I’m asking you, I know a lot of you are Londoners, when were you last in Hyde Park? How much are you actually using it for the benefit?”
This is perhaps the most unique and challenging feature of anarcho-capitalism. In the absence of government, what are now government assets would necessarily be owned by non-government entities. There are theories of how streets, parks, and public spaces could emerge and function in the absence of a state, but the transition from a state to a stateless society requires a more complex divestiture of state property and services.
Schumacher does not detail a method of divestiture for Hyde Park, but he implies a direct sale or auction, with the cash paid being returned to taxpayers:
“How do we find out what this costs us? When we actually can make a bidding process and see what value we are foregoing and we could gain, and lower taxes and give all of us more prosperity.”
In recognition of the longstanding public use of the land, a better approach might be for the government to bequeath the land to a for-profit corporation or non-profit trust with all citizens receiving voting ownership shares. This land trust could then decide whether to preserve the park with deed covenants or sell portions of the land for development. Shares could be bought by those who feel strongly about the land from those who do not, to increase their influence on the decision-making and allow the value of ownership to be discovered.
Critics may rightly point to corruption in some historical examples of industrial privatization. Because government confiscation of tax money and property is arbitrary and irrational, it is difficult to define a divestiture process that is not equally arbitrary and irrational. Even in a well-intentioned divestiture, there would be winners and losers.
But there are winners and losers in the status quo of government ownership and maintenance of property assets as well. As Schumacher points out in an extended quote that was cut from the news media soundbyte:
“We need to know what this costs us, what this costs all of us and what this costs residents in Scotland, that we are actually protecting this and preventing this.”
Indeed, why should farm workers in Scotland be taxed to pay for a lush park in the wealthiest neighborhood in the United Kingdom?
Who owns Hyde Park?
Even if this unfairness can be acknowledged, Schumacher’s idea of selling Hyde Park still seems like an unprecedented extreme measure.
But it is not. Hyde Park has been sold once before.*
After the 1649 execution of Charles I, Parliament began selling Crown lands to raise money for Oliver Cromwell’s military campaigns. In 1652, Hyde Park was sold as three lots to Richard Wilson, John Lacey, and Anthony Deane for a total sum of £17,068.
However, when Charles II returned to the throne in the Restoration of 1660, these lot sales were deemed null and void. Ownership of Hyde Park was reassumed by the new King.
Any question of whether the King was right to void those property purchases is now academic. But it raises a crucial question:
Who holds a legitimate title to Hyde Park?
The land that is now Hyde Park was confiscated by the tyrannical Henry VIII from Westminster Abbey during the Reformation, when he decimated the monasteries of England. The King wanted the land to extend his exclusive hunting grounds, in particular for game of “hare, partridge, pheasant, and heron.”
Imagine the outrage today if Donald Trump were to announce that he would use his presidential power to confiscate a large piece of land in a major city exclusively for his own personal amusement. No one would consider this to be a legitimate transfer of title. Yet that is exactly the nature of the title that the British Government claims for Hyde Park.
Hyde Park is stolen land, the legacy of a tyrant, and a symbol of political privilege that persists to this day in Great Britain, and in every other nation that grants legitimacy to those who govern by threat of force. The legitimacy of the government’s ownership of Hyde Park should be rejected, and the park should be divested to its rightful owners – the people.
This delegitimization of government should not stop at Queen Elizabeth Gate. Through confiscation, coercion, and conquest rather than commerce and cooperation, modern governments claiming authority to initiate force have constructed an edifice of power, privilege, and property that has gone unquestioned for centuries.
Patrik Schumacher’s questioning of this legitimacy is long overdue.
*Hyde Park history referenced from Edward Walford, ‘Hyde Park’, in Old and New London: Volume 4 (London, 1878), pp. 375-405. British History Online http://www.british-history.ac.uk/old-new-london/vol4/pp375-405 [accessed 25 November 2016].
The Pariah Schumacher
His speech was intended to be provocative, but while it has fomented a firestorm of incredulity, dismissiveness, and name-calling, it has not provoked the kind of debate he may have been hoping for. Not one of his critics has taken up the intellectual challenge of refuting his specific ideas based on their merits.
Schumacher appears to have been humbled by this vociferous backlash, expressing regret for the embarrassment felt by his friends and colleagues.
However, in a mea culpa released in the days following his speech, he reaffirmed his vision for the potential of anarcho-capitalism to create a better society for all:
“I envision a society based on free association and mutually voluntary interactions and exchanges, where we grant each other more degrees of freedom and believe in each other’s capacity of self-responsibility and charity, where the rules of interaction can be explored, discovered and allowed to evolve and where organisational and moral standards emerge and adapt to new challenges and technological opportunities in a dispersed, bottom up process of discovery and cumulative selection/validation (rather than via majority rule), ideally without too many foreclosing impositions from a control centre that is lacking the information processing capacity to adequately cope with increasing levels of complexity and dynamism of our global society.”
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