Progress and Poverty 1969:
The Contribution of Jay W. Forrester
Jerome S. Medowar
[Reprinted from the Henry George News,
JAY W. FORRESTER, an electrical engineer, is a professor at the
Massachusetts Institute of Technology. He became interested in
corporate economics and devised a plan whereby the internal
functioning of businesses could be studied through the use of a
digital computer. Applying the same techniques to the internal
functioning of the city, he published Urban Dynamics (M.I.T.
Press) in May, 1969.
Through the use of a digital computer it is possible to deal with the
complexities of the modern city and to determine what causes it to
grow, mature and stagnate. In order to employ a computer in analyzing
complex urban systems the author simulated a model city. The history
of the United States was recreated in the model, with the assistance
of politicians, city administrators, teachers and experts in urban
affairs. New values were used to analyze emerging circumstances for as
long a period as 250 years, the point where a city reaches stagnation.
The process is not simple, in fact the rate variable for incoming
underemployed alone, is regulated by 31 different feedback information
influences. However, Professor Forrester sets forth the principle that
intuitive and reasoning processes based on cause and effect have no
application and are wrong most of the time, since cause and effect
relationships are generally only coincidences in a complex system.
For instance, the experts assume that increased job opportunities
will alleviate the condition of the poor, but the model shows that the
availability of more jobs drew more poor to the city and created
crowded slums, resulting in a decrease of new enterprise and mature
business and an increased need for taxes.
It is believed by most of the experts in the urban affairs area that
housing programs offer the greatest opportunities for overcoming the
urban dilemma. Professor Forrester's computer runs indicate that these
programs, aimed at ameliorating conditions for the underemployed, have
increased unemployment and reduced upward economic mobility from
underemployed to labor. A low cost housing program, his model showed,
would at the end of 50 years result in a population decline of skilled
workers of 30 percent, at which time there would be fewer jobs and
less housing for the poor and less new business.
Although the author repeatedly refers to this process as being
experimental, he draws a number of conclusions:
The city is and should be master of its own destiny. Revival must
come from within. Outside help will be of short term only. Outside
money can help very little - the problems may respond by growing in
size and difficulty to match any available financial support. The goal
is to restore economic vitality and absorb the present underemployed
groups into the mainstream of productive activity.
The tax structure tends to penalize those who can contribute most to
the well being of the city while favoring those who generate costs.
Therefore the city attracts those who pay least and encourages those
to leave who pay the most. On the short term this seems humanitarian
but on the long term it hurts the poor. If industry is overtaxed it
may move out of the city, and since industry requires less public
service than homeowners, taxes should be shifted away from it.
There should also be a reconsideration of property rights. "Do
the property rights of the landowner include the right to generate
decay which blights the entire urban system?" Professor Forrester
believes the owner should be encouraged to take self protective
actions that generate renewal. He states that transportation can
encourage land separation into large non-intercommunicating sectors,
resulting in increased commuting costs, psychological trauma and time
lost from productive activity.
It was Henry George's belief that the community by its presence and
activity gives rental value to land, and that property which benefits
from community presence should bear the brunt of taxation. This would
in itself encourage the user of land to put it to its highest use.
Proper land usage with emphasis on owner self generating renewal can
be brought about through land value taxation. This will lead to the
full use of available land and will eliminate crowding while at the
same time limiting suburban sprawl. Proper land use would make long
distance commuting unnecessary and modern transportation would not
lead to urban blight as indicated by Professor Forrester's computer
runs. This would be economically unfeasible due to tax structures.
As pointed out in Urban Dynamics, industry, the substance
that runs through the veins and arteries of the community, must be
encouraged. It was George's belief also that the checking of
production was the vehicle that led to depressions, want and poverty.
Through land value taxation industry is relieved of taxation and at
the same time capital investors and workers receive their full
interest and wages free of restrictive taxation.
If the time has come to subject Henry George to the test of the
computer age, Professor Jay W. Forrester's method may be worthy of