Brave new world

As you sit at a sidewalk café in Paris, sipping your coffee and enjoying the views down a broad, tree-lined boulevard, you can offer your thanks to Baron Haussmann.

In the mid-19th century, Haussmann brought urban planning to Paris. He imposed the modern system of diagonal boulevards, open squares, spacious railway stations and restful green spaces on the cramped, irrational street pattern of medieval Paris. In doing so, he also wiped out much that was picturesque about ancient Paris, eliminated low income housing and cheap spaces for small businesses, and caused, indirectly, a greater polarization of the city between areas for the rich and for the poor.

For many low income inhabitants of Paris at the time, the result of Haussmann's demolitions was a disaster. For the city, the changes resulted in a wealthier and more beautiful urban area.

I thought of this example while reading a short piece in the New Yorker entitled "Creative Destruction," inspired by the recent earthquake in Japan. The article makes note of non-intuitive evidence that recoveries from disasters such as earthquakes -- when they occur in advanced economies -- often take less time than predicted, and that the ultimate result is often beneficial to the community. The recovery is fast because the damage is to the physical assets of the society, not so much to its human capital. The damage is often beneficial, because it clears out old capital assets and businesses, replacing them with new physical plant and newer, more productive businesses.

This beneficial result can be considered "accelerated depreciation." Of course, accelerated depreciation has the additional, unfortunate effect of devastating the original inhabitants and businesses while it benefits newcomers and new businesses. It speeds up "gentrification" and "modernization," so that these ordinarily gradual changes occur overnight, rather than over a generation or two.

A few posts ago, I was lamenting the possible fate of my poor house when the "Big One" hits Seattle. I now realize that the earthquake will have a cleansing and productive effect. My old-fashioned (if beautiful) 1922 brick Tudor will be replaced by a modern, clean-lined, energy-efficient, light-filled, open-plan piece of residential architecture. I will be replaced by a happy young couple (employed, most likely, by Microsoft) and their two eager, talented kids with high GPA's.

Seattle will be a better place. Whether I'll be a happier person, however, remains doubtful.