Boom Towns: Restoring the Urban American Dream
Stephen J. K. Walters
Stanford, Calif.: Stanford University Press, 2014, 210 pp.
The image of a boom town is commonly used to describe exceptional conditions through which a village suddenly becomes a city. Often such conditions are the discovery of mineral deposits that attracts industry and commerce. While in their booming condition, such towns are oases of societal flourishing relative to their preceding state. In Boom Towns, Stephen J. K. Walters, a professor of economics at Loyola University in Baltimore, explains that cities in general have the capacity perpetually to be forms of boom towns. Cities can serve as magnets to attract people and capital, thus promoting the human flourishing that has always been associated with cities at their best. It is different if cities are at their worst, as Walters explains in bringing Jane Jacobs's Death and Life of Great American Cities into his explanatory ambit. There are no natural obstacles to cities occupying the foreground of societal flourishing. There are obstacles to be sure, but these are man-made. Being man-made, they can also be overcome through human action, at least in principle even if doing so in practice might be difficult.
Walters's analytical framework is centered on property rights and the ownership of capital. The boundary between boom towns and bust towns depends significantly on how towns treat property rights and, thereby, the returns owners are able to obtain from their capital investments in a city. Such capital is immobile, which makes it potentially subject to banditry and extortion by city officials. To the extent cities practice such hostage-taking, investment in those cities will be discouraged and bust-like conditions will emerge. Walters uses recent experience in the presence of state-wide tax limitations in California and Massachusetts to support his thesis. San Francisco and Boston had experienced significant declines in population until tax limits were imposed at the state level. In consequence, the return to capital invested in those cities increased and the decline in population was reversed.
While security of private property is pivotal for the generation of boom towns, flourishing cities also require public property that is well managed and complementary to the commercial and industrial efforts of its residents. Cities, however, may manage public property badly, undermining flourishing in those cities. Bad...