Seventy Years Proving the Failure of Government Planning
The futility of imperfect government officials thinking they can create and perfect society.
Naomi Carmon, Faculty of Architecture and Town Planning, Technion – Israel Institute of Technology, wrote a white paper in May of 1999 that spans three generations of government intervention in development, which still describes economic development policies used by government planners today. The author of the paper concludes that these economic development policies were not examples of government failure, but proof that even more government intervention is needed.
Another conclusion of her analysis would suggest that the government has no business in planning.
Here are the goals listed in this white paper by Naomi Carmon:
“The goals of this paper are to analyze policies of intervention in deteriorated urban areas, learn from past experience and propose a set of improved regeneration principles of action. The paper is composed of three parts. The first is a condensed historical analysis of planned – mainly public – intervention in distressed residential areas, primarily in the United States and the United Kingdom, but also in European countries and Israel (the author’s country). The analysis introduces three generations of policies, and includes a description of the initiatives with their socioeconomic background, a recapitulation of activities and actors, and evaluations of the outcomes. The second part presents Israeli case studies of three neighborhoods, representing the three generations of neighborhood remedies and their lessons. The third, which is policy oriented, proposes strategic and tactical principles for a new generation of urban regeneration policies and programs.”
A fundamental truth emerges from Naomi Carmon's systematic analysis of urban renewal across three distinct generations. Her research, spanning the US, UK, and Israel, reveals a consistent pattern: government intervention fails, regardless of approach, methodology, or good intentions.
The evidence is damning. Each generation attempted to address the shortcomings of its predecessors, yet each failed spectacularly.
The implications extend far beyond urban policy. They reveal something more troubling about the nature of government control itself.
The Bulldozer Generation: Destruction Masquerading as Progress
The first generation of urban renewal embodied "the era of the bulldozer" with mass demolition and redevelopment from the 1950s through the 1960s. US officials believed physical improvements would solve social problems.
They were egotistical control freaks who had no clue how people function, nor did they care. They treated citizens like mindless dolts who must be managed like children.
The numbers tell the story. By 1967, federally funded urban renewal projects demolished 404,000 dwelling units while highway construction displaced roughly 330,000 urban households. Critics recognized this as "Negro removal" designed for "retenanting the sites with white, taxpaying citizens."
The Israeli case of Neveh Eliezer demonstrated the futility perfectly. Residents who were relocated to better physical housing continued to struggle despite the improved surroundings.
Physical determinism failed because bureaucrats cannot engineer social outcomes. The market exists because humans exist, and since humans are unpredictable, it is impossible to determine future trends or demands.
The Rehabilitation Generation: Massive Investment, Predictable Failure
The second generation shifted toward comprehensive neighborhood rehabilitation with social services integration and resident participation. Programs like Model Cities and Project Renewal poured massive public investment into declining areas.
The market would have provided organic solutions that government programs could not. People are unpredictable in their demands, making their own choices based on individual and household needs.
Government programs created artificial market signals not based on reality. The choices of affluent households would have been organic and not government-inflicted, which is always worse because it affects everyone.
Despite significant investments, these approaches failed to change neighborhood status or prevent outmigration of more affluent households. The market responds to human demands naturally, while the government remains lousy at predicting market demands.
British data validates this pattern. Urban policy towns widened their gap from 9% behind the national average in 1997 to 13% behind in 2004. Personal income fell from 17% behind to 18% behind, with no improvement in unemployment.
Meanwhile, successful towns receiving no substantial urban regeneration funding improved their position.
The Partnership Generation: Market Distortions and Uneven Benefits
The third generation adopted business-oriented approaches through public-private partnerships. Tel Aviv's Florentine neighborhood exemplified this approach, where revitalization improved the area's image but created uneven benefits favoring "stronger stakeholders." Aka, the people with the mula.
Benefits are always uneven because some people have advantages and opportunities that others lack. The government exacerbates this issue with arbitrary rules and regulations while spending unnecessarily.
Every dollar consumed by government bureaucracy means one less dollar circulating in the economy. The money gets replaced with useless things that require ongoing maintenance costs, compounding the problem.
The most damaging long-term effect involves removing people's choices and placing them in the hands of unimaginative and controlling government planners. Urban redevelopment projects have wasted over $43 billion since 2000, with publicly constructed facilities providing little to no economic benefits.
The government takes money from people and out of the economy through taxes for failed programs. The theft prevents money from flowing into private markets where it would rebound repeatedly to provide what consumers demand.
The Market Alternative: Consumer Choice as Quality Control
In areas with lower taxes and fees, fewer land use laws, and reduced building regulations, development occurs just as rapidly as in regions with government intervention. The difference lies in efficiency and responsiveness to actual demand.
Consumer choice serves as the ultimate quality control mechanism. Markets respond to the individual’s and household needs when people make their own decisions, creating organic solutions that the government cannot replicate.
California's regulatory nightmare illustrates the problem perfectly. One LIHTC project cost $739,000 per apartment due to strict zoning, local preferences for commercial space, and state labor requirements. Restrictive zoning consistently results in higher home prices, with the most significant impact on expensive homes.
Removing development fees, land use restrictions, and lengthy approval processes would allow neighborhoods to address deterioration organically. Markets naturally respond to human demands without artificial government signals.
Policy experiments testing liberalized rules show promising evidence. Increasing housing supply through deregulation helps temper prices without the negative consequences some feared.
The Fundamental Reframe: From Social Engineering to Human Freedom
Carmon proposed five principles for "effective urban regeneration": preventing segregation, pursuing equity, creating partnerships, adopting gradual approaches, and employing context-specific strategies. These principles assume that the government can successfully manage complex social outcomes.
The alternative framework requires only five different principles: prevent government intervention, live and let live, pursue happiness, create and produce, and follow the Golden Rule.
Reframing this artificial government social structure recognizes that planning for your neighbor is fundamentally misguided. Government officials cannot plan out our lives because they are ours to decide.
Urban planners need to find new careers and exit the lives of citizens who are unwittingly affected by their plans. The profession itself represents an obstacle to organic urban development.
If a city eliminated its planning department, eliminated property taxes, and removed most zoning restrictions, the result would approach the closest thing to a better society humans could obtain on Earth. With individual rights protection through the justice system, markets would naturally address urban challenges.
Unfortunately, with government planning, there is no protection of person or property. The government grows and only knows how to consume and destroy. Morality becomes a subjective theory, the criminals are exalted to victims, every vice is subsidized, lawlessness reigns, and all the evidence of this crime against humanity is painfully apparent.
The Stakes: Liberty Versus Tyranny
Seventy years of evidence across three generations demonstrate that the government cannot successfully intervene in urban development. Since the research paper examined government development plans from several countries, with the same noted failed results, it proves that this is not just an American problem. Each approach failed, despite different methodologies, massive investments, and good intentions.
The pattern reveals something more profound than policy failure. It demonstrates the inherent impossibility of central planning in complex social systems.
Government officials are human, not psychics. They cannot predict market demands, understand individual needs, or engineer social outcomes. Their attempts create artificial signals that distort natural processes and waste productive resources.
The choice is clear. Either continue funding failed government programs or trust markets to respond to human demands naturally.
If society does not cut the government's umbilical cord, it will suffer total tyranny. Urban planning represents not just inefficient policy, but a pathway toward authoritarian control over individual choice and freedom.
The market alternative offers hope. It recognizes human unpredictability as a feature, not a bug. It allows organic solutions to emerge from individual decisions rather than bureaucratic mandates.
Carmon's research provides the evidence. The interpretation requires recognizing that government intervention fails not because of poor execution, but because of fundamental impossibility.
The time has come to abandon the planning-centric approach entirely and trust markets to solve urban problems naturally.
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