How New York was turned around

One of the sites I read regularly (and link to on the right) is that of Lew Rockwell, the head of the Mises Institute. The site is devoted to the libertarian philosophy. What surprises me is how much I actually agree with many of the articles there. I doubt the philosophy would work in the extreme form that they espouse, but certainly they have some very valid ideas.

Another (faux-)libertarian blog that I read, but don't really recommend, is Don Luskin's. Unlike Lew Rockwell's writers, Luskin's self-proclaimed libertarianism only seems to extend as far as tax cuts. Lew Rockwell and the other writers on his site loathe the Bush administration, because they have done more than any other government in US history to undermine civil liberties, increase government intrusion into every aspect of life, and wage unnecessary war at taxpayer expense. Don Luskin loves the Bushies, because they keep cutting taxes.

Incidentally, till some time ago, Luskin's main agenda -- practically his only agenda -- was attacking Paul Krugman, Princeton professor of economics and NYT columnist. Since the NYT columns disappeared behind a pay firewall, Luskin seems a bit lost for subject matter (other than tax cuts).

Nevertheless, now and then Luskin does come up with some interesting links. For example, his site is where I found a link to this story on how Rudy Giuliani turned around New York City.

When I was growing up, in the 1980s, distant New York merely inspired visions of crime and horror. And with good reason. Since the 1970s, its economy had been going down the tubes, as firms relocated, and street violence had become rampant.

Giuliani turned that around in an astonishingly short time. His strategy was twofold: he was tough on crime, and he was easy on business (big or small). To quote the article: "The private economy, not government, creates opportunity, he argued; government should just deliver basic services well and then get out of the private sector's way." In particular, the most basic service was maintaining law and order. He had the reputation of using harsh methods, particularly in minority neighbourhoods, but the article argues that his administration's record, in terms of dubious police violence, was better than its predecessors'. Meanwhile, to deal with unemployment, he encouraged business by cutting taxes (that were at insanely high levels): the tax cuts caused a boom that actually increased tax revenues. Giuliani also cut spending on a lot of things, including welfare, emphasising jobs (however lowly) instead.

The result? Today New York City (where, post-Giuliani, I spent two years) is among the safest cities in North America, and easily the most vibrant and dynamic. Unemployment has crashed, business and tourism have boomed, you can be on the streets at 3 am and find your way safely home -- or find a place to hang out and enjoy yourself, if you prefer.

What can we learn from this? Indian cities (other than Delhi) are not terribly prone to violent crime, but petty crime and sexual harassment are rampant, and unemployment and lack of services are severe problems. Can we replicate some of Giuliani's success here? I don't know, and I'm sure that a lot of what Giuliani did won't work here (and I doubt we have city officials of his commitment and energy). But I wholeheartedly agree with Giuliani's premises: that the government should supply basic services, and that the government should not be an employer beyond what is necessary to supply those services. In India, we have the opposite situation: basic services are terrible, and the government is an employer on a massive scale (and is expected to be).