Globalization and the Airport

I had originally planned to position this as a day late and dollar short review of Greg Lindsay’s book Aerotropolis: The Way We’ll Live Next. Yet I think in a way the title misleads. The word “aerotropolis” conjures up dull visions of depressing airport development, security lines, and power points at conferences.

But what Lindsay has done with this book is really something much bigger: He has told the story of globalization as seen through the lens of the airport. Because of that, the book isn’t entirely convincing. Air travel and shipping is naturally presented as the primal force driving globalization. Key advances such containerization play no role. Yet in my view this is one of the best overviews of globalization I’ve read, and I think deserves to be read by anyone who cares about and wants to understand the new world we live in. From China and India to Dubai, Amsterdam, Louisville, LA, Africa, and more locations, this books shows the fantastic speed of change in our world and what globalization is doing to it.

What is an aerotropolis? Lindsay discusses this at some depth in an interview with Geoff Manaugh that originally ran in BLDGBLOG. But the most well known view is that espoused by John Kasarda – a professor, consultant, and Lindsay’s nominal co-author – who serves as a sort of high priest for it. In Kasarda’s view, the aerotropolis is in effect two things: 1) a large master-planned airport city consisting of a gigantic hub airport linked to a nearby metro region by roads and rail, surrounded by segregated zones of airport related businesses such as warehouses, offices, hospitals, and even housing, and 2) a short hand for a new vision of the city in which the airport is the dominant shaper of economic life, similar to how ports and rivers previously shaped the cities that surrounded them.

If you are interested, Kasarda lays out a picture of the aerotropolis in a short video you can watch. (If the video doesn’t display, click here). Pay particular attention to the title slide as we’ll return to it later.

A few things jumped at me out of the book. One of them is the close linkage between the aerotropolis and its boosters with authoritarianism (and by extension, similarly for globalization and its boosters). The second is that, despite vast sums of money and authoritarian rule, I didn’t come away with a sense of anyplace in the world that had fully pulled off Kasarda’s vision. Indeed, there are as many or more failures than successes. And even those successes are far from perfect ones.

As Lindsay notes:

The aerotropolis and authoritarianism go hand in hand. The first is a city built from scratch to chase economies of speed; the second are the only ones in a position to sign off on a massive construction project before its too late. It’s no accident that Kasarda has found early adopters in the Middle East and China, followed close behind by Asian nations with a legacy of military rule.

Kasarda himself seems blissfully unconcerned with this. The book notes that “high-functioning dictatorships such as Dubai’s don’t faze [Kasarda]. If anything, they’re the only ones who move fast enough.” Kasarda is basically willing to consult with anyone, anywhere – as long as their money spends and they are interested in building an aerotropolis.

I think this is a great summation of perhaps how we got to where we are with globalization. Globalization is often portrayed as an inevitable, inexorable process that sort of came about as an emergent property of advances in transportation and communications technology. But as with the aerotropolis – a master-planned environment conceived and dictated from the top down – illustrates, globalization is in fact a man-made creation, one willfully brought into existence by the efforts of various parties.

Globalization was at least in part the product of human architects, and one of them is Kasarda. Globalization was also a product of elites, often unelected, who harnessed the market making power of government to shape the world to what they perceived as their advantages. Globalization has surely had many winners – but also many losers. But among the biggest winners have been architects themselves. When the globalization booster class profits from the very policies they recommend, we are perhaps entitled to view their prescriptions skeptically as we would anyone with a conflict of interest.

Now, I’m no anti-globalization luddite. Let the record show that I’m an unabashed free trader. And in addition to the top-down nexus, there are plenty of stories of bottom-up entrepreneurship as hustlers of all nations look for ways to take advantage of what this new world gives them. Globalization has dramatically lifted the incomes of hundreds of millions of people around the world. That is something to be celebrated.

But this isn’t a simple black and white “for” or “against” matter. We can support trade and an increase in global economic flows, while having serious reservations about the way it has been architected. In particular, the rise of authoritarian locales in this world order and the almost amoral embrace of them by Western boosters like Kasarda is something that concerns me.

In the last 30-40 years or so, we in the developed West buried business and local communities under an increasing mountain of regulations. In a sense this was rational. As we grew more prosperous, we were increasingly able to use our new found wealth to purchase a cleaner environment, safer products and workplaces, better health care, etc. and to ensure that our decisions considered a wide range of impacts before they were implemented. But this logic assumed that we forever would remain top dog in the world, and thus, while we might pay some dollar cost for this out of our own pocket, it wouldn’t fundamentally threaten our economy or upward social mobility.

Alas, the world didn’t turn out that way. In this new era, the era of the internet, containerized shipping, and the aerotropolis, localities may not be able to pick up and move, but businesses can. And moved they have. Maybe not physically a plant relocation, but the choice of location for expansions. This hasn’t always been to places with perhaps a more moderate regime of regulation, but increasingly to dictatorships that operate under a wild west type model and are willing to do almost anything, including rewriting laws, to accommodate this new business. The aerotropolis is but one example of this. As Lindsay notes, Kasarda “proposes building cities by corporations for corporations, guaranteeing their survival by tailoring them to clients’ specifications–beginning with the airport.”

In effect, what we have done is delinked trade from any larger consideration, social or environmental. This enables not just cost arbitrage, but regulatory and even moral arbitrage. In the Cold War era the West was willing to do business and support a wide variety of unsavory regimes and practices – just as long as they didn’t go communist. That was a mindset that, perhaps in an unexamined way, continued after the Soviet Union’s collapse. But what might have been at least understandable in the context of the Cold War is less so today. The fact that we’ve basically said that, save for rules pertaining in a narrow sense to trade, we don’t care who you are or what you do in your country is a decision with consequences.

As for Kasarda, the impression I get from the book and various articles I’ve read about him is less of a man interested in getting rich than of someone who is looking for someone to implement his new vision of the aerotropolis city. In the video above, Kasarda quotes Le Corbusier in the title slide. Corbu famously proposed demolishing much of historic Paris in order to build a city of freestanding modernist towers. He was more than willing to sweep away the entire urban order in order to remake the city in accordance with what he thought was a better vision – his vision naturally.

Kasarda falls into this mode. There’s a new world coming, and the ones who will benefit most from it are those who are most prepared to reshape their urban geography to accommodate this new master planned form. The fact that Kasarda quotes Le Corbusier without any sense of irony is telling.

But a funny thing happened on the way to the aerotropolis. Even where the nominal ingredients were in place (including authoritarian government), there seem to be precious few places where the aerotropolis has been pulled off successfully. In fact, the book probably relates as many failed as successful ones, and at no point did I read a case study and come away going, “Wow – that’s it.”

But this should come as no surprise. Kasarda believes authoritarian rule makes things happen, then is shocked, shocked, to find that there is rampant cronyism, corruption, and clout seeking that compromises the vision.

Kasarda also bemoans the failure of planners to truly get the aerotropolis concept and that even when they do, they often fail to follow through on their planning concepts correctly. This too was as predictable as the sun coming up in the east. In the full aerotropolis vision, infrastructure and land around the airport is controlled by a single entity that is chartered with not only allocating space to various types of uses, but also deciding what is the highest and best use for the sites. This is nothing less than central economic planning, something we should know by now isn’t going to work. And even in the best of cases and with the best of intent, planning never survives intact in its original vision when making contact with reality. Another thing that struck me is that given the extremely high rate of change and creative destruction this new air enabled globalization is creating, the notion of “highest and best” use is ephemeral. The minute you build something, it’s legacy. To stay in top of your game then would require in effect stripping people of their property rights so that you can scrape and start over whenever the economic flows shift in a new direction.

Ultimately this is one thing that gives me hope. Back in the 70’s, people like John Kenneth Galbraith believed that the Soviet central planned model was a viable and competitive alternative to capitalism and that we’d have to respond in kind. Similarly the 80’s the Japanese way based on choosing favored industries, etc. was extolled. Neither model panned out in the long run.

Today we yet again see those like Tom Friedman who have a crush on authoritarian or centrally planned places that can get things done. But it doesn’t just matter if you can get things done, it matters what it is that you do and how you do it. Ultimately I think in the long run a market system, with strong property rights, civil rights, democracy, and the rule of law, is a better bet for the long term. We’ll see what happens.

In the meantime, we have to stop acting like we are the only game in town and make sensible changes to our own business climate and trade policies. I can’t lay out a vision of all what that is, but regulatory rollback and reform has to be a big part of the equation. The book brings that home. In the nation that once built the Hoover Dam in one year without even being sure when they started that it would be possible to build or exactly how they’d get it done, in the nation that put a man on the moon in less than a decade, we can’t even add a simple runway to an airport in a decade these days. In that amount of time, China can built 50 or so new airports from scratch. Unlike Friedman, I don’t suggest we imitate China, but imitating the can-do spirit of our own democratic past wouldn’t be such a bad thing. The fact that we built a high quality, award winning replacement for the I-35W bridge that collapsed in Minneapolis in only 18 months shows that we can still do it – if we choose to.

From a developed world perspective, the other thing that hit me from the book is that having an aerotropolis, even a successful one, doesn’t necessarily do much for you. Lindsay wrote extensively on Memphis (home to FedEx) and Louisville (home to UPS’s main air hub). Memphis likes to bill itself as “America’s Aerotropolis.” One of its local leaders recently said, “While other communities are striving to create an aerotropolis in their community or region, many of those efforts are aspirational, whereas in Memphis, the aerotropolis model is a reality.”

As my recent coverage noted, however, out of 51 US metro areas with greater than a million people, Memphis ranks #48 in college degree attainment. Its unemployment rate of 10.4% is higher than the nation as a whole. Between 2000 and 2010, Memphis lost nearly 6% of its jobs, a rate far worse than the US as a whole. It’s GDP per capita trails the US average, as does its per capita income. Fed Ex might be a great thing for Memphis, but it hasn’t changed the fact that Memphis is one of the most struggling cities economically in the US. (Louisville’s statistics are better, but it is still clearly an economic laggard). Meanwhile, aerotropolis-free Nashville is booming.

More passenger hub type airport cities have done better – Dallas, Atlanta, Denver, etc. – yet this was based mostly on a pre-existing pattern (e.g., Chicago) or came into being as an artifact of the hub and spoke system, airline mergers, etc. well before anyone had thought of the aerotropolis concept. They are also generally based more on domestic than global connectivity.

Even overseas, where airports have done better at building the fortunes of cities, particularly those that previously lacked good global connectivity, there are plenty of misses to go along with the hits.

The lesson I draw is that while good air connectivity is critical for a city in the global economy – indeed, I almost draw my threshold population for what constitutes a minimum viable city in the globalized world in terms of whether or not it is big enough to support a major airport – the airport is only one ingredient needed for success, not the entire recipe. Cities that pin their hopes too heavily on airport led transformation are bound to be disappointed. And even if you go in with the best of intentions trying to do airport development right, you are far from guaranteed to have success.

I should close with a few final words about Kasarda. I know I sound like I’m picking on him in this post, but that’s less from anything personally about him than it is about the trend he represents in globalization (much as one might say about the aerotropolis itself). I don’t get the impression he’s a nefarious or bad guy, but rather that he’s a technocrat in love with his idea of the master-planned aerotropolis. In fact, I give him a lot of credit for being willing to sign on to a book that actually highlights a number of places where he acknowledges he didn’t get it quite right, and projects that didn’t work where he was involved. He has certainly evolved his vision over time to take into account lessons from the past, but not yet the key lesson that there are limits to what we can plan.

The aerotroplis, inhumane as it may seem at times, has its merits as an abstract idea, but the reality is likely rarely to match up to Kasarda’s expectations. As Dietrich Dörner put it in his classic The Logic of Failure, “Because planning involves only imagining our actions, we are essentially free from the irksome conditions of reality, and nothing prevents us from simply ignoring the conditions necessary to carry out an operation.” Indeed.