Let’s Draw Some Sweeping Ideological Conclusions From The Indian City Of Gurgaon

“Whether you’re liberal or conservative,” writes Kevin Drum, “you’d be wise not to try to draw too many lessons for the United States from Gurgaon.”

As Barney Stinson would say: Challenge accepted.

The first takeaway point from Gurgaon’s success in the face of the lack of municipal government is to underscore the incredible value of good government. In India, good government is exceptionally rare. Not only is there a ton of corruption, there are often downright absurd regulations. Central Mumbai has a maximum floor area ratio of 1.33 and the Indian government favors draconian parking mandates. This bad government is so bad that Gurgaon was able to overcome a lot of initial disadvantages. Americans spend a lot of time debating “big” versus “small” government, but quality of public services varies widely from place to place and makes a huge practical difference.

The other is that scale matters. A lot of what we think of as necessary “public services” could, in fact, be provided privately. Imagine if someone owned all of San Francisco and leased the land and structures out. Well obviously he’d want to have some kind of fire department and building standards to protect his investment. And he’d want to have a security force, since crime would reduce the value of the rent. And he’d want there to be some parks, because people like parks and their presence will increase the rent he can charge. (Indeed, my building includes a small private park). And obviously he’d need schools and really all the rest. Of course, a private owner might catastrophically mismanage the city, but so might public officials. But in order to internalize the benefits of privately provided infrastructure, parks, public safety, etc. the scale of the enterprise would have to be really big. Like the size of a whole city.

San Francisco has a land area of about fifty square miles. In rural Nebraska they have roads spaced exactly one mile apart, so you can easily find a largely uninhabited fifty square mile block (mine’s even airport-adjacent):

So how come private developers don’t buy up all this farmland and build a city there? Well, maybe they never thought of it or maybe Big Government won’t let them, but realistically it’s hard to do things on that kind of scale if you’re not a state. To build Libertopolis, Nebraska, we’d probably need eminent domain plus a loan guarantee at which point Libertopolis is a big government plot.

Of course once Plotsville is up and running, you might wonder where the line between firm ends and state begins. Presumably actual and potential residents of Plotsville would put some positive value on having input into how the place is run. You could try to make decisions based on surveys, but it might be easier to assemble some kind of representative decision-making council. Alternatively, a lot of municipalities de facto function like private associations of their current residents, using zoning rules to control the pace of new construction and minimum lot size rules to restrict the ability of poor undesirables to move in. Essentially all states severely curtail immigration, and the generally accepted view is that Denmark should operate for the benefit of Danish people not on a principle of universal benevolence. And it’s a nice, albeit dull place, sort of the gated community of nations.