Texas and London

by

I am a subscriber and a regular reader of the Economist despite their maddening tendency to recommend US presidential candidates that are left-leaning. The Economist is very useful on business and international issues and their US focused articles sometimes have a candor and simplicity that is lacking elsewhere.

A recent cover story titled “America’s Future – California v. Texas” described the falling fortunes of virtually bankrupt and high-tax California against the high flying economy of Texas. In typical Economist style, there is a one-page editorial type summary of the article in the front of the magazine and then two special sections on California and Texas, respectively.

One critical element of the story, however, is mentioned nowhere in The Economist’s article – that is of personal freedom vs. state control.

London, as anyone who has visited recently will tell you, is completely blanketed with security cameras. Virtually the entire city is under surveillance. At the same time, London has completely disarmed its residents of any firearms. Even the police, for the most part, are unarmed (although they do have heavily armed police at the airport and on call for other types of engagements). And building anything in London is difficult and slow, with myriad restrictions; notably they limit the heights of buildings and also require extensive open spaces outside the cities. London also has a famous congestion tax, which hits all drivers who enter the city limits and is managed through a vast system of security cameras, as well.

It isn’t fair to say that everyone in London is behind all of this; but these facts are generally accepted by the populace and aren’t likely to be changed any time soon.

The Economist basically reflects many of these views; they support free markets but with a huge dosage of state control. They have limited use for other types of freedom, such as the right to bear arms, or to live your life in private, or to drive where you please without paying inordinate taxes.

In these items they can feel a similar kinship with the liberals that run California. California has implemented their own “green” policies and controls on businesses where ever possible. Gun control and limits on ability to build or expand properties (except those that they already own, of course), are their stock in trade. California has high taxes (like London) and is marked as the least favorable business climate in America. Unions are viewed positively overall (or at least accepted) among the California liberal elite as well as London.

The interesting thing is that as The Economist looks to Texas, they miss out on the larger context of what “freedom” means. While London has no guns, Texas has essentially empowered their own citizens and businesses to arm themselves. When I lived in Houston about a decade ago, not only was concealed carry widespread, most larger businesses (pretty much every large grocery store or big restaurant) had an armed security guard at the door. Other laws, including “stand your ground” have been implemented in Texas in one of the most liberal senses in the US. A local bank near where I lived had a guard who was lauded because he saw robbers (guys wearing masks) coming up towards the bank and he shot them in the driveway before they even entered the bank. There were so many stories like this down in Houston that I don’t even think they all made the paper – most of what I heard came from friends or colleagues.

In addition, Houston had no zoning whatsoever when I lived there. Near my apartment was a home for the blind, a large factory, and other buildings inter spaced together. Not far from our apartment was a 60+ story skyscraper, sitting virtually alone in a business neighborhood. Zoning in other parts of Texas was limited, as well.

Since there were no unions in the construction trades (that I was aware of), buildings were put up in an unimaginable time. In the mid-1990’s I saw a PF Chang’s on Westheimer Road built in what seemed to be just DAYS – they put up spotlights and worked around the clock – it was amazing. One week I left to travel and it was a parking lot and I came back a week later and the exterior was largely completed.

Texas has always leveraged its energy resources – laws are friendly to drilling and oil and natural gas are a backbone of the economy. California, by contrast, does all it can to ensure that no one drills offshore or otherwise extracts or transports energy in the state. Texas also “walled off” their electric grid from the rest of the US and worked to ensure that there was adequate capacity, while California failed to invest and actively tried to shutter key electric plants (such as their nuclear plants).

I think that there is a lot more to the changing of the guard in America’s economy from California to Texas than The Economist understands – they ought to move down to Texas for a few years and get a first-hand education. Freedom includes the right to bear arms, a lack of unions, and a general freedom to improve your property without intrusive state control. Also note that freedom includes a limited role for the state, and California has the highest personal income taxes in the nation while Texas has no income tax.

It is hard to believe that they wrote these articles without highlighting these key differences as to why California was declining and Texas rising – they mentioned demography (net inflows and outflows of residents) – but they didn’t discuss the CAUSE of the demographic changes, which include:

– high taxes vs. low taxes
– minimize energy use vs. leverage existing resources
– heavy business regulation vs. light business regulation (unions, zoning)
– limited rights to bear arms vs. highly armed populace

The Economist should open their eyes to the full picture of what works and what doesn’t. A heavy handed state drives away new business and entrepreneurial leaders, and unions and government squeeze the rest until it all falls apart.

Cross posted at LITGM

27 thoughts on “Texas and London”

  2. Paul Marks at Samizdata regularly posts on his frustration with the statist views at the Economist. I recall subscribing to it many years ago, and being astonished at the failure of the writers to make any distinction between the actions of huge state owned or subsidized firms and private businesses.

    The articles also seemed to be cheerleading the formation of the huge conglomorates that were all the rage a few decades ago, before reality struck, and the new trend of selling off marginal businesses and concentrating on core profitability centers became the newest corporate fashion.

    It was the source of one of my favorite examples of political vs economic decision making though—the story of the two billion dollar unfinished concrete plant in some African country that was a case study in corruption, non-economic thinking, and futility.

    At any rate, the writers of the magazine simply can’t bring up the various subjects you mention. If they start to deal with the damage done by taxes, regulations, and environmentalism gone berserk, they would have to start questioning some of the basic building blocks of the statist mentality. Cognitive dissonance that severe would cause serious injury to a whole list of never-questioned, sacred cow beliefs. That would never do.

    As has been pointed out many times on this site, among others, every place in the country where collectivist doctrines and statist policies have been put into place has suffered declining economic and social fortunes, from New York through the “rust belt” states to glorious, sunny California.

    If there were a group of public health theories that routinely resulted in disastrously higher death rates and rising child mortality, one would expect that these theories would soon be rejected, once the results were publically known. It requires a remarkable level of rhetorical gymnastics and obfuscation for economic and social policies, which are every bit as unhealthy as the worst of the false medical theories that have plagued us, to be replicated in so many contexts even when they have no track record of success anywhere they have been tried.

    The progressive myth is one of the great slow motion disasters of the last century. Unfortunately, it appears to have been resuscitated for further mischief in the 21st.

  3. Carl – A huge thanks for this. Is the article available online?

    My overwhelming impression of the contrast, gained by living in Texas while visiting California several times in the ’90s, was that it can be defined in terms from Covey’s “7 Habits”: abundance mentality vs scarcity mentality. Texas probably has fewer natural resources than California, certainly has far less attractive scenery (and I say that as a landowner with property in the Davis Mountains), and — not to overlook the obvious — has a far longer and equally poorly controlled border with Mexico. And the lower house of its legislature is nearly half Democrats, close enough to require plenty of budgetary horse-trading. But its political processes, and their results, are vastly superior to California’s. It’s all about attitude: can abundance be created, or must scarcity be adapted to?

  4. I saw this cover at a family member’s house – they still subscribe, while I let mine slide for no other reason than, well, I’m busy.

    (We had a group of scientists, dear friends who are quite statist, imo -immigrants from Europe – leave our hospital for a southern state where the medical school isn’t suffering huge budget cuts. Unlike the rest of us. I teased them a little (we are good friends and tease each other about politics a lot, it’s no big deal) it’s not so bad to have a freer economy, is it?

  5. Onparkstreet.

    That kind of in-country emmigration can backfire in states with good policies. People leave places like California and then vote for the same kind of policies and politicians that caused the mess in California. It’s a common complaint in Nevada, Arizona, Colorado.

    When I was looking in Texas to acquire apartment buildings (for a former employer), I had several managers in the San Antonio market complain to me about people moving in from California. They had moved there for the lower cost of living and then complained about the much less generous welfare and workfare. Here’s hoping that Texas’s strong culture of self-reliance is more resilient to such nonsense.

  7. I’m from Texas, but have lived in California. In Texas, people are trusted to exercise freedom, and crooks get shot repeatedly. ALL our women are packing – we personally prefer our women self reliant. Bad guys are just like anyone else, why get shot? And if you live, welcome to the Texas Dept. Of Corrections. Hard labor, anybody? Folks want to work here, and make good employees.

    Compare California. People vote with their feet. U-haul charges a lot more now because there is a real demand getting out of California. Oh, by the way, did I mention that we don’t have a state income tax? There are a lot of Gay people here, but it’s live and let live. I’m bilingual, and was raised among hispanics, so I’m a happy camper. Tacos de sesos, anyone?

    I worked in California for a while, and always felt that gang bangers and such had the run of Southern California. Here in Texas we have a much harder viewpoint of such things. Essentially, between the Grand Jury and the Distict Attorney, well, crooks get shot or jailed, and that’s how we like it. Don’t sound like California, does it?

  8. I put this down below Shannon’s post so that he could have top of page

    Thanks.

    Texas is doing startling good and paradoxically, many of Obama’s policies will disproportionately benefit Texas. Alternative energy? We’ve got lots of wind and sun and lots of wide open space to build transmission lines in. When that fails, Texas will sell everybody natural gas for the peak/backup generators that keep the lights on. Card Check aka union leg breaking? Texas is a right to work state so industries will flee states with corrupt unions and relocate to Texas. When Government motors goes bankrupt, Toyota will build new plants in Texas. When he bails out California so they don’t have to reform their high taxes, even more high tech firms will relocate to Texas.

    One thing that a lot of people miss about freedom in Texas is that it creates more tolerance. People like to think of Texans as xenophobic yet Texas as much better race relations than does California. This is especially true in the case of illegal aliens. Texas has roughly the same proportion of illegal aliens as California yet political anger over illegals is all but absent compared to California. When government begins to pick economic winners and losers and begins to elevate one group over another, people begin to divide into groups so as to get a bigger chunk of the spoils.

    Freedom begets toleration and rewards merit. People often forget that.

  9. ElamBend,

    Yeah, that’s a real problem. Perhaps those of us that favor less gov regulation should pick a state and all move there? That probably wouldn’t work, though, we would just become a big fat target. Sigh.

  10. The nice thing here in Texas is that if you want to live in the country, then you have to deal with things yourself. As for leg breaking unions here in Texas, please…..Toyota is surely welcome, wind and solar manufacturers, all are welcome! Give ole Gov. Perry a call…..biz friendly enviroment? You bet!

  12. Plumpplumber(Balding),

    As for leg breaking unions here in Texas, please”¦..

    Sorry, that was a typo. I meant to say that industries will flee from corrupt unions to Texas. Of course, even if we did get unions here, the old intimidation trick probably wouldn’t work. There is a reason there has never been any significant organized crime in Texas.

  14. From the article,

    Texas still lacks California’s great universities and lags in terms of culture.

    Strange that The Economist can’t seem to see that California’s advantages (which were once unarguable) in education, infrastructure and culture all resulted from California’s past as an almost fanatical pro-business culture.

    They write as if California and Texas were twins separated at birth and California chose one path and Texas another. Instead, we are seeing two different states at different parts of their economic development. Up until WWII California was still primarily an agricultural and resource extraction economy. After WWII came their big manufacturing boom. It was that boom that created the attributes that The Economist so admires. Corporate money and millionaire philanthropy from mining, oil and aerospace paid for California’s colleges. The high culture of California is likewise the result of people who made a lot of money in business shelling out obscene amount of money for fine food and entertainment.

    By contrast, Texas was primarily an agriculture and resource extraction state up until the mid-80’s. Right now Texas is roughly where California was circa 1960. Texas is in the process of building up its great schools and culture will follow money just as it alway has.

    Conversely, if California cannot get its act together, it will lose all those great advantages.

  16. Does anyone remember the meme, I think from the 2000 elections and then repeated during the 2008 election, about the “failed state of Texas,” and a continuous stream of comments about Texas having a terrible environmental situation?

  17. I vaguely recall an article pointing out one contrast between the two states: the Texas govt’s income is heavily dependent on the sales tax, which illegal aliens pay, and the California govt’s income is heavily dependent on the state income tax, which illegal aliens don’t pay.

    Can you count, suckers? I say, the future is ours…if you can count!

    How does Texas lag in culture?

  20. As an Englishman, writing as an outsider to both Texas and California, and tending to avoid the lily-livered policies espoused by the Economist, I believe that Texas would get my vote on the best place to relocate. Any State which elects Arnold Scwhartzenegger as it’s Governor because of what the voters think they are getting, (Terminator; ‘I’ll be back’ etc.) rather that what they were actually voting for, which was s self-publicising film actor with an impressive rack of muscles but very little else, gets exactly what they deserve.

    As I wrote on my own modest little blog some time back regarding American attitudes towards domestic safety, I firmly believe that the laws which removed what few guns available to the public in Great Britain were a retrograde step, as the deaths from shootings, although still small by American standards, are climbing every month. mainly because only the bad guys have guns in Britain!

  21. Two key differences between California and Texas:

    1) Private land ownership. Well over 95% of Texas land is privately held. California has less than 50% of its land privately held. The old railway corporate land holdings and Federal Lands make up over 50% of California land.

    2) Climate — California has a very mild climate and friendly environment. Texas doesn’t, and many areas in Texas became habitable only with air conditioning. Texas is also flat. This makes housing both easily available and cheap

    These two factors taken together result in the different cultural attitudes on environment, private property and statist/progressive attitudes.

    California style “not in my back yard” don’t build or develop anything, anywhere, environmentalism in Texas is literally viewed as theft.

    Those trying it in Texas get killed at the next election by property owners.

    Private property is developed by the property owners with very few regulatory restraints, and thus, you don’t get insane property bubbles because new housing is built when market prices signal they need to be built.

    New roads get built with few obstacles, with the notable recent exception of toll roads. Gov Perry’s Trans-Texas corridor interstate toll roads — to be built and operated by foreign companies — are as popular as venereal disease and may see him beaten by Sen Kay Baily Hutchison in the next Republican primary.

    That is not to say that Texas is actively pro-pollution. Texas has over 1/2 of the USA’s oil refineries, but has less than half of the oil refinery pollution.

    It is just that Texans view the environment as a hostile force that must be conquered to enjoy life while in California the environment is something that people want to preserve and have common access too.

    So California has set itself up for a politically correct tragedy of the commons with it’s environment as it’s population goes up and its environmental stasis lets it public infrastructure decay to nothing.

  22. Shannon’s 7:31 PM comment yesterday really resonates with me, as does his later observation about both states being at diff. points in their econ. development. The concerns I have with Texas for the future are (a) the voting habits of the increasing Latino population and the gov’t they would vote in (how was Ann Richards as governor down there?) and (b) the horrific social indicators for Latinos and blacks of my generation (25 & under), especially the single mothers and the failed education.

    That cannot be a good set of indicators for the future, which is why while the criticisms of the Economist for not being able to see the entire picture are entirely accurate, what they did focus on in the end seemed quite crystal clear in the (seemingly) accurate picture of grave peril they offer for the future of Texas.

  23. Have never been to Texas or California (although would love to see both), but I did visit London. Have to say – Carl’s observation is right on target.
    I was quite uncomfortable under constant surveillance: cameras everywhere on the street – not only on crossroads or government buildings’ entrances (like Scotland Yard, f.i.) – that would make some sense (although I’d prefer different, non-intrusive means of acquiring security or traffic control). No, the cameras are mounted on every retail facade, too – and aimed at the sidewalk. I went to a Kensington public library (my hotel didn’t have free internet access, despite 110eu p/night range) and while standing in 30-min line I have counted 9 (nine) cameras within my field of vision.
    Banks, museums, the Tube, etc are all packed with very obvious surveillance; I had the feeling that I’m presumed guilty/considered a criminal by default.
    In the past I had a chance to work on security/safety plans, schedules and specifications for a headquarters of major Swiss bank here in NY (and CT) – and never experienced such disregard to public self-sufficiency. In the contrary, we made an effort to use as little devices and to keep them as unobtrusive as possible without sacrificing the purpose – which was NOT to watch the visitors, but protect few carefully determined key point withing the bank branches. Later, I had a chance to participate in designing a juvenile detention center – here we did have an objective to watch the residents. But even there I’m sure we had less cameras and they were less obvious that what I experienced in London.

  25. California, Texas, and England make interesting comparative cases. Texas has substantially less state direction than either California or England; between California ad England it’s more a matter of what areas the state interferes in rather than overall interference. I suspect with the latest round of state tax hikes Calfornians are more heavily taxed than Brits.

    Some of the increased level of state control in England comes from the fact that left-liberals and socialists have been in power longer and have had fewer structural obstructions to the exercise of power (e.g., no entrenched Bill of Rights) Some comes from the fact that England is much more densely populated than either California or Texas, and there is literally no space for the kind of rapid development of low-density land that is common in Texas and California, although land-use controls in the older, richer parts of California mean that the rapid expansion takes place far away from the city centers — Riverside or Stockton rather than Santa Monica or Palo Alto. However, the outer fringes of the London metro area (High Wycombe, Basingstoke, etc.) have the closest thing possible these aspirational city areas.

    The other really interesting comparison is Japan. They are even more densely populated than England, yet they have no zoning, no planning, and hardly any eminent domain. They have very little publicly owned open spaces — much of the urban open space is temple grounds, which are open to public use typically for a fee. So much of the new housing is developed by companies that do land development and run private electric commuter railways — siting a station greatly increases the nearby land value, and rather than publicly subsidizing the railroads and giving the increase in land value away as a windfall, the railways capture the value themselves, thus financing the railways. The railways don’t make a profit directly, nor are they expected to, no more than skyscraper developers expect elevators to be profit centers. This model was actually created by American interurban railway companies in the 1910s but abandoned here because of antitrust law and municipal government parasitism on the interurban companies. As with Deming’s TQM management methods, the Japanese took the model and made it work better.

    As for the British disarmament of the population and its (inevitable) consequences, this is a relatively recent phenomenon, not a deep-seated culutral trait. At the Sydney Street “siege” in the early 1900s, when several armed radical Latvian separatists were holed up, the unarmed police requested random passers-by to loan them weapons, whch they did, quickly arming all the police on hand. The Brtish system of unarmed police is sometimes spun as a cultural preference for an unarmed society; the original intent had been a civil-liberty point — that the citizens should be better-armed than the police in a free society.

    Pity about what happened. I wonder if it could ever be reversed.

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