III. Intangible Assets: Social Capital and Place

Making Place Matter: Recognizing the Value of Urban Assets

Healthy communities do for people what ecosystems do for the rest of nature: provide a measure of stability and positive synergy in the otherwise chaotic lives of individuals. They also provide the means for recognizing mutual gain so that commitments to social and economic systems that inclusively benefit community members can occur.

       Much as high-performance companies look into the future to anticipate changes in the market and technology, investment in continuous knowledge creation can build a collaborative advantage for communities and local markets.

       Knowledge creation occurs when a community or an organization invests intentionally in understanding explicitly and tangibly what may previously have been vaguely, intangibly and tacitly understood. 100It also occurs because of the desire to make the things that matter to people and communities count: quality of life considerations such as a clean environment, convenience and access, a sense of community and place, a labor force and job access, all represent values held in common that can lead to new economic opportunities through market development. By taking the time to understand and more explicitly value these assets, we can both express and aggregate the many quality of life demands as new goods and services, and build systems to deliver these in the places and communities that need work.

       In the example cited at the beginning of this paper, the insurance industry was developed out of the explicit recognition of risk. The industrial revolution was made possible in part by the recognition that what steam engines were good for was work: by developing measures of work as "horsepower equivalents," it became possible to finance the value of what the engines did rather than the cost of the engines themselves.101 Grain elevators and refrigerator trucks may have been the technological edge enjoyed by the young industrializing Chicago, but it was the ability to commodify and monetize (value) into the future what these were worth that enabled the central development of the futures exchanges. 102No less than today's emerging derivatives markets do for Wall Street (or than the original coining of "money" as representing exchange value thousands of years ago), market development depends on the ability to recognize and systematically understand hidden values and assets, however intangible or tacit, and to create the systems within which new value can be captured.103

       Markets develop according to the definition above of knowledge creation. However, not all efforts at market development succeed. Observers of how markets typically fail have developed lists of obstacles to effective market functioning, including: capital misallocation, organizational failures, regulatory failures, informational failures, long developmental lead times, risk averse behavior by consumers, high levels of risk and uncertainty for potential producers in startup industries, perverse and split incentives, false or absent price signals (markets are good at setting prices but terrible at recognizing full costs), incomplete markets and property rights.104

       A good example of the implied confusion arises in the public health field, particularly in the determination of the health effects of cities and regions. Respiratory ailments are on the rise, and the frequency distribution reports are aggregated at the level of city and region. 105The risk factors of air pollution are mostly and increasingly associated with emissions from motor vehicles, including both cars and trucks.106 Most of the use of vehicles is to move around and between cities, rather than to facilitate circulation within. The failure to clearly perceive and report this situation perpetuates a "density is bad" myth.

       Similarly, the bulk of time wasted in congestion occurs either in the newer suburban areas, or by travelers choosing to travel in their cars rather than by more reliable means between cities. Typical journey to work travel times are lower for residents in older, more densely populated and accessible areas, but this benefit is masked statistically by large area aggregated reporting.107

       A third example, also regarding public health, relates to the health benefits of a more pedestrian friendly environment. People who walk more tend to drive less. The Centers for Disease Control finds that the physical activity associated with walking is associated with lower rates of both morbidity and mortality from atherosclerotic disease (heart disease and stroke). 108They also find for the population at large that when corrected for density, the risk of pedestrian accidents (crashes) may be lower in older and more densely populated areas with good amenities (sidewalks, signage, rules) as compared with newer areas which may lack these amenities altogether. An analysis by the Surface Transportation Policy Project of the relevant data basis found that the most dangerous places in America to walk in fact are neighborhoods (such as much of Florida) that were built without sidewalks. Their finding for these areas was that irrespective of income, "you are much more likely to be hit by a car that to be attacked by a stranger with a gun."109 It appears that neither the health nor automobile insurance underwriting industry is currently able to incorporate such understanding.

Dense connections and opportunities for rapid learning

Because of their compact nature, cities offer enormous opportunities for interaction and learning between individuals and organizations. They may contain the largest stocks of social capital, as represented in community and civic organizations, knowledge-based industries, independent journalism, and inter-generationally endowed institutions with local interests such as libraries, universities and philanthropy. 110

       Several researchers have suggested that it takes more than just human capital to address economic inequities. Paul Romer distinguishes human capital from ideas, which he defines as "the instructions that let us combine physical resources in arrangements that are ever more valuable." 111

       Thomas Homer-Dixon defines ingenuity as a key ingredient, defined as an aggregate supply of ideas that a society applies to its practical problems. In particular, he suggests that the supply of technical ingenuity "depends on an adequate supply of social ingenuity at many levels of society. Social ingenuity is key to the creation, reform, and maintenance of public and semipublic goods such as markets, funding agencies, educational and research organizations, and effective government."112

       Human ingenuity is usually so abundant that it hardly seems remarkable. On a daily basis, for instance, an average city receives an uninterrupted and seemingly coordinated supply of thousands of tons of food, fuel and materials. The amount of ingenuity needed to run such a system is not the same as the amount needed to create it, because at any one time a vast array of routines and standard operating procedures guide people's actions. But the system and its countless elements are the products of the incremental accretion of human ingenuity. Many small ideas and a few big ones have created them over time. A survey conducted for a group of national foundations of "Innovations in Metropolitan Cooperation" by Julia Parzen identified hundreds of emergent collaborative efforts.113 Their characteristics were that they tended to be public-private partnerships; supported by the sense of urgency on the part of civic leaders; creatively configured to be representative, inclusive and diverse; and "custom-designed" to address the issue at hand.

       None of the ten "tangible" assets listed above would be possible without the simultaneous existence of and long-term investment in social capital, that is, in the systems, institutions, relationships, collective knowledge and rules which make change and improvement possible.

       In the book Built to Last, James Collins and Jerry Porras identified the attributes of organizations that have lasted one hundred years or more. The two most fundamental attributes were a clear and unwavering sense of purpose, and a commitment to continuous and periodic improvement. 114

       A more complete "balance sheet" of the assets of cities and communities must therefore include such intangible assets as community and the sense of place; local knowledge creation and support for invention and ingenuity; values held in common and a culture which support these values; an orientation towards the future; and a commitment to equality and continuous improvement.

Best Opportunities for Self-Actualization and Community Transcendence

A truly sustainable society is one that honors the human need for self-actualization as well as providing the conditions for physical survival. Abraham Maslow suggests that human needs form a "hierarchy," ranging from physical survival and safety to self-actualization. Gratifying lower levels (e.g. ensuring safety from harm) creates less resistance to focus on higher levels (e.g. self-actualization).

       Work on sustainability needs to be done in this context of the full range of human needs, not just the needs for physical survival. This broader focus is the natural outgrowth of the connection between sustainability and human learning. Learning cannot happen if our higher needs are not met. Thus building the "adaptive capacity" of human beings requires worrying about more than just our physical survival.115

       If we either fail to penetrate deep enough to the hidden positive values that motivate what we do, or simply fail to see or appreciate the full range of values that are important to us and other people, we may fail to understand what is motivating the more tangible and seemingly threatening trends. 116On the one hand, people seem to respond favorably to well-designed presentations of imagined futures: whether the subject is the Chicago Auto Show, or the Futurama exhibit at the 1939 World's Fair, people seem to thirst for immediate access and beauty, in a word, transcendence.117 On the other, surveys of suburbanites seem to suggest that the communities to which people are moving actually have the kinds of values which people are seeking: community and a sense of place embedded in the natural landscape, proximity to rural ways of life, schools that work; and that people believe that rather than "running away" from the city and older places, they are "running to" community. 118

       There is an emerging renewal of appreciation for a sense of place in the aesthetic sense of the term. In this sense, social history is embedded in urban landscapes. Dolores Hayden has documented how "place power" carries a cultural and historical sense.119 It carries the resonance of homestead, location and open space in the city as well as a position in a social hierarchy. An individual's sense of place is both a biological response to the surrounding physical environment and a cultural creation. People make attachments to places that are critical to their well being or distress. Children show an interest in landmarks at three or earlier and by age five or six can read aerial maps with great accuracy and confidence. Space is shaped for both economic production-barns or mine shafts, or piers, or a factory-as well as for social reproduction---housing for the workers, managers, and owners, a store, a school, a church. As the town grows, configuring streets and lots formalizes the earlier uses of land and path systems. This leads to infrastructure such as paved roads, bridges, water systems, streetcars, and railroads, all of which have substantial environmental effects.

       All of these different kinds of private and pubic planning activities and public works have a social as well as a technological history. People fight for and against them. People also construct and maintain them. Long after community character has changed or disappeared, people celebrate cultural heritage. They can do so formally and institutionally, as in the case of cultural museums and oral history projects.120 From 1984 to 1992, The Power of Place was a small nonprofit corporation whose purpose was to situate women's history and ethnic history in downtown, in public places, through experimental, collaborative projects by historians, designers, and artists. "Rediscovering the African American Homestead" traces the Biddy Mason project where author served as director and historian. "Reinterpreting Latina History at Embassy Auditorium" discusses the reinterpretation of a union hall used by Latina and Russian Jewish garment workers. "Remembering Little Tokyo on First Street" covers the creation of a historic district of small businesses launched by Japanese American immigrants. All these cover practice as well as theory: public art, dialogue, oral histories are used to remember and to reproduce public space.

       People also celebrate community more informally. The powerful attachment to places that may no longer exist physically or socially is expressed as reunions. In older African American communities in Atlanta, annual reunions have become a method of celebrating and remembering community. For example, in the small neighborhood of Cabbagetown (population 1,200), the 1991 annual reunion drew 30,000 participants.121 On Chicago's near south side, there is significant community redevelopment of the Bronzeville neighborhood around traditional African American landmarks and cultural institutions (newspapers, music clubs, locally owned insurance companies). 122Using this kind of strategy to build a sense of heritage and community can work if we build within a conceptual framework of "cultural citizenship." As Rina Benmayor and John Kuo Wei Tchen have defined it, an identity that is formed not out of legal membership but out of a sense of cultural belonging.123

       People also perceive and anticipate threats to community character and heritage. The National Trust for Historic Preservation supports the enhancement of small town character through its "Main Street America" program.124 In 1990, a coalition of organizations came together to consider responses to the expiration of the federal legislative authority which supports transportation investment. Each organization present gave a reason for participating in a change-oriented process. Jackson Walters, President of the National Trust, stated: "After completing six hundred Main Street community projects, we just found out that Wal Mart has been following us around, and we're not going to take it any more."125 More recently, the organization Imagine Chicago has formed and is dedicated to ensuring that the next generation of Chicagoans will grow up with an appreciation for their own cultural heritage and for local heritage as well. In the words of the organization's founder, this should result in a world where "nothing and no one is wasted."

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