Author Archives: Nanocivics

About Nanocivics

Mike Sims is the creator of; he brings 20 years of experience in local government leadership and the eye of a trained economist to the question of cities and families. Mike writes teaches at Trinity Valley Community College and serves as the Assistant City Manager of Terrell, Texas. Mike and his wife, author Sarah Sims, homeschool their six children. Mike has a B.S. in Public Affairs from Indiana University and a Master's Degree in Economics from the University of Texas at Arlington. Mike was featured in the award-wining documentary Subdivided: Community and Isolation in America.

Black Swans and Nanocivics

One of my favorite economists, Tyler Cowen, talks about Black Swans here:

While I agree with much of the discussion, I think he could improve the specification of his point about countries.  He states:

“If systemic risk is now higher does that mean we should have larger countries or smaller countries? … The small country is more useful because the smaller country is nimble… [or] the smaller economies don’t handle risk as well, they can’t save their own banking systems. … The case for larger countries becomes stronger if you live in a world where you suddenly discover it has more black swans than you think.”

This way of looking at the problem isn’t really the best way to ask the question.

The interesting question is, ”If systemic risk is high, should we have strong central governments empowered with a robust national Keynesian toolkit or strong local control with a national approach even F.A. Hayek would love?”

To start the nanocivics look at the question, consider this figure:

In any society there is distribution of outcome expectations.  While most swarm to the conventional wisdom to form some sort of consensus expectation, there remains a minority (firms, people, governmental entities) which reject the consensus and expect something different.  Some, perhaps only a very few, may even be expecting what the consensus will later deem the Black Swan.

If the preponderance of financial, economic, policy, and business matters are subject to group decision-making through direct or indirect central government control, then every actor is forced behave as if they agree with the consensus expectation.  Is not Keynesian action only possible when it is favored by the majority?

However, in a decentralized system, those whose expectations don’t line up with consensus are free to pursue alternate strategies.  The few who expected the Black Swan stand firm and can continue business or personal operations through the Black Swan event.  Does not Hayek’s Pretence of Knowledge exhortation extend to economic forecasting, business investment, and household borrowing?

The nanocivics preference for empowering the small-scale relationships of local public life and Legatum’s own data on the link between prosperity and freedom agree on this.  After all, free markets are resilient for a reason.  In part, because people and businesses try different strategies based on different expectations about the future.  Their reward comes from the market, not government spoils.

That said, Cowen’s Black Swam remedy of “study more history” is a welcome and timely prescription.

The Thousand Fibers

Herman Melville, obsessed with whales and nanocivics.

It fell to the granddaughter, Eleanor Metcalf, of this long-forgotten and unsuccessful author to thrust, after his death, his works back upon the public.  Although a prolific writer, he found success not with his novels, or poetry, but on the travelling lecture circuit. Victorian audiences thrilled to his stories of travel and he extolled them to attend to the simple relationships of personal life.

Ironically, his great work, which couldn’t crack 3,000 sales in his lifetime, is now a staple of high school and college literature classes; while his advice regarding how we live linked to one another goes unheeded.   Who was he?  Before we find out, let’s look at the dissolution of bonds that he wished to cultivate:

Joel Kotkin describes an unraveling:

Increasingly, family no longer serves as the central organizing feature of society.  An unprecedented number of individuals — approaching upwards of 30% in some  Asian countries — are choosing to eschew child bearing altogether and, often,  marriage as well…

The  widespread movement away from traditional values — Hindu, Muslim, Judeo-Christian,  Buddhist or Confucian — has also undermined familialism. Traditional values  have almost without exception been rooted in kinship relations. The new  emerging social ethos endorses more secular values that prioritize individual  personal socioeconomic success as well as the personal quest for greater  fulfillment.

Likewise, family dissolution in Seoul, South Korean leads to a bitter end:

Once a country where filial duty and a strong Confucian tradition saw parents revered, modern day South Korea, with a population of 50 million, has grown economically richer, but family ties have fragmented. Nowadays 1.2 million elderly South Koreans, just over 20 percent of the elderly population, live – and increasingly die – alone.

Writing of Huntsville, Alabama, Hazel Borys of Better! Cities and Towns offers:

On my last trip to see my aging parents, I was struck again by the loneliness that comes from diminished connections. They are both inspiring people, and in their younger years were notably adept at making connections with and for others…

However, over time those connections are slowly dissolving….

What if our family home had been in a more walkable neighourhood, where they would have been prone to walk the easy thirty minutes a day that is proven to increase memory and decrease the risk of dementia?

These sorts of places are the ones rich in social networks, which – interestingly – build neural networks. Loneliness is as dangerous as smoking, and more dangerous than obesity or inactivity.

These three perspectives on isolation show us a bleak path for modern culture – lose  religion, lose family, lose neighbors, and gain but lonely senior years.

Let’s visit the failed author’s advice:

“We cannot live only for ourselves.  A thousand fibers connect us with our fellow men; and among those fibers, as sympathetic threads, our actions run as causes, and they come back to us as effects.”

Fitting it was then that the ‘sympathetic thread’ of a loving granddaughter led to discovering the unpublished yet now classic Billy Budd and to resurrecting the stillborn Moby Dick.  For Herman Melville, that’s the power of nanocivics, one generation harvesting what another has planted.

Giving Thanks for Sobornost and Catallaxy

This Thanksgiving I’m thankful for Sobornost and Catallaxy.   While often mistaken for a Ukrainian side dish consisting of spiced beets and a Greek method for preparing heavily oiled pig liver patties, these are not epicurian delights for your holiday meal.

Here’s wikipedia notes on them both:

Nikolai Lossky explained that sobornost involved  “the combination of freedom and unity of many persons on the basis of their common love for the same absolute values.”[4]

…catallaxy was … coined and made popular by Friedrich Hayek who defines it as follows:[3]

‘the order brought about by the mutual adjustment of many individual economies in a market’.

Nanocivics is where they intersect.

Nanocivics captures the idea of sobornost because exchanges we make – family, commercial, spiritual, emotional and intellectual exchanges - form and regulates those common bonds.  Civilization is, fundamentally, the outgrowth of those exchanges and bonds.  Society possesses common ideas and common loves because parents share them with children and because friends/teachers/artists/everyone share them with one another.

Also, nanocivics caputes the idea of catallaxy because the small-scale relationships of local public life are a spontaneous order.  People don’t need to be told to make social networks, they just do. People don’t need to be told to make cities, they just do.  We have a society because catallaxy works from the bottom-up, like DNA in a human cell, to make our families, our neighborhoods, our cities and our world.

Not Catallaxy

 This has both sobornost and catallaxy.



The Most Interesting Quote In the World

I like to consult with defunct economists from time to time, just to see if there’s anything in the ash heap worth relighting so we can stand in its glow again.

Let’s try something from Friedrich Hayek, best remembered as the author of The Road to Serfdom.  This from his 1967 work Studies in Philosophy, Politics and Economics:

We must make the building of a free society once more an intellectual adventure, a deed of courage. … Unless we can make the philosophic foundations of a free society once more a living intellectual issue, and its implementation a task which challenges the ingenuity and imagination of our liveliest minds, the prospects of freedom are indeed dark. But if we can regain that belief in power of ideas … the battle is not lost.

Yep, that still burns bright.  Perhaps you’ll agree that nanocivics offers just that intellectual adventure, or real vision if you prefer.  More on that here.

Oh, and here’s Hayek’s mad skills on the mic:



I think these books are about the making of the video:

The connection between growth and, well, growth

The Shanghai region (left) and the greater Tokyo region (right) aren’t that different and they both compete with regions in the U.S. for jobs and development.


We’d all like faster economic growth but sometimes we act like it shouldn’t involve too many people. Adding more people to an area increases the number of folks who need to provide value in the economy in order to make a living. If they do, we’re all better off. Urbanization – this very process of growing larger and larger cities – benefits the economy and we would be wise to support, not hinder, the connection between regional growth and economic growth.

To start, let’s define a region as an urban core, or core(s) and the surrounding areas that are roughly a daily commute to the same. For example, the Dallas-Fort Worth region includes areas a commuting distance west of Fort Worth and a commuting distance east of Dallas. The core areas need to draw on the outlying labor supply to fully support the employment opportunities at the core. It is employment in these core areas which drive the productivity of the modern economy.

We need the core parts of the region to keep growing, so we have to maintain transportation access to them. Likewise, we need the suburban and near-rural areas to keep growing so we can’t restrict growth in those areas. Because employers chase the available labor market, both the core and the extremities of a region need be healthy to allow the region to grow. Too often, political lines are drawn along the idea that the core competes against the fringe for growth. This is occasionally true but only after the region has competed against other regions (including those outside the U.S.) to attract the growth in the first place.

If we divide up as a nation, suburban and rural versus inner city and urban core, none of our regions will successfully compete in a world economy.

Economists who practice in urban theory will typically discuss the benefits of urbanization: increased exchanges of innovative ideas, greater flexibility for the workforce from access to employers in multiple industries, shared access to specialized business services that save costs for all industries, and greater efficiency in providing core infrastructure (electric transmission and sewer treatment, for example). In regional economics, bigger turns out to be better.

Conversely, economists who focus on ‘macro’ topics typically disdain interest in the total output of the economy (gross domestic product, GDP) with a preference to the more refined GDP per capita (total output per person).  China and Japan represent well the differences between the two; let’s look at them using the United Nation’s estimates for 2010 in U.S. dollar values.

China, the second largest economy in the world, had a GDP $5.7 trillon. Japan, the third largest economy in the world, had a GDP of $5.4 trillion. Seems like two similar countries, right? Not really, China has many more people than Japan so the output per person must be much lower. China’s output person was $4,354 and Japan’s was $43,141. So, Japan’s better off, right?

This answer isn’t so clear because it’s worth pointing out that intellectual bias against raw GDP obscures our basic lesson of urban economics: the more people you have around, the more opportunities there are for various synergies and savings to develop.  So, while GDP per capita is a great measure, increasing urban population itself also provides economic benefits, which later turn into increases in GDP per capita.

We can instead point out that the average person in Shanghai is roughly as well of as the average person in Tokyo. Further, that the difference between the two countries is China’s vast inland poor. Indeed, China is in the midst of the largest migration in human history and urbanization alone is part of the economic formula that has allowed China’s coastal urban areas to thrive. As the video from the Economist below describes, since 1978, 160 million Chinese have migrated to China’s urban areas. That’s equivalent to the entire population of Mexico plus the entire population of Spain leaving home and going somewhere else.


Thus, while our biggest competitor has been embracing large-scale regional growth that will help them for years to come, what have we been doing? Unfortunately, we’ve been talking up urban versus suburban political divisions.


Grow Dat? Yes, Grow That!

“Go ahead, you know you want some strawberries. You don’t have to hide under there, you can eat them.”
Photo from

It’s an old observation that connecting with the land and the natural cycles of agriculture is a great teacher of humility, wisdom and common sense.  This is why agrarian philosophies are resurgent.  Some mull over philosophies, other live them.

New Urban News highlights the Grow Dat program in New Orleans.  As the video shows, they’re action oriented:



This is the joy of focusing on the small scale relationships of local public life.  Who Dat is nanocivics in action.  The relationships and lessons built through cooperative, hands-on farming and food preparation benefit anyone who tries their hand.  The good folks in Grow Dat have learned to make synergy and value for others through competition and cooperation; they’ll carry that for a lifetime.

Visit these guys to learn more.

Lessons from Gettysburg

Walkable Gettysburg
Photo by Jeremy Hess courtesy of the Gettysburg CVB

I’m in Gettysburg for a few days and the city, as you would expect, has much to offer.

Of course, Seminary Ridge comes to life when you see the Lutheran Seminary. The narrow streets and historic buildings leading to the edge of Cemetary Hill make it shocking to learn that only one civilian was killed in those three days of fighting despite the proximity of town to battle. Walking the mile of Pickett’s Charge, where 12,000 started out over that hopeless mile but only a few hundred managed to temporarily breach the Union line, brings life to the obvious courage and the athleticism of the men. There’s an easy 10 feet rise in the final 30 yards of the charge, where they would have been completely exposed and met by a five foot stone wall at the end of their run.

The local economy of the time was the traditional American family farm. That long-gone economic model held so many benefits for society in terms of encouraging a multi-generational approach to the land and to the importance of daily labor. The battlefields all hold stories of families that cleared, tended, maintained, and harvested with a view toward building a sustainable future in what was still a young country. By and large, they were successful and we would not have advanced from the Civil War to winning two World Wars without that agricultural vision.

However, while I’ve nothing against a healthy nostalgia for the family farm, I’ve always considered it unrealistic to bring it back in any large-scale sense.  You can family farm a niche crop or animal with great success.  However, family farming a mass production food product often involves too much competition from too vast of commercial enterprises.  Should this render the family business obsolete?

Certainly not, Gettysburg, here again, provides the example.  The old town offers grandfather-father-son law offices, multi-generation doctor’s offices, family-run restaurants, and, of course, family owned tourist traps of every size.  Seeing this diversity in the city put me in mind of this Allan Carlson suggestion:

…governments should favor family-owned micro-enterprises. The most socially disruptive effect of the industrial revolution was the way it severed the place where adults work from the place where adults live. Most of our current family questions—from loud disputes over gender roles to child care to low fertility—derive from this great disruption.

Remarkably, the 21st Century has been blessed by technologies that can help to restore the bond between workplace and home: notably the home computer and the internet. Accordingly, tax systems should favor new, home-based, family micro-enterprises. Financial bodies should mobilize capital, at favorable rates, for these family entities. State regulations should protect these family businesses from the depredations and intrigues of the big corporations.

From brothers and cousins shoulder to shoulder summoning the bravery necessary for Pickett’s Charge to small-town Maine boys fighting with their life-long friends from intimate one-room schoolhouses and holding Little Round Top with an audacious bayonet charge, Gettysburg demonstrates the power that comes from the small-scale connections.  It is all too easy to look at America today (or England, if you like their statistics better) and see we lack that fidelity to family and place.

Just as farmers around Gettysburg cleared out forest and rocks to make fields for their grandchildren, we would be wise to take some advice from Carlson and clear out places in our lives and our public policy for our future generations.  Maybe then, instead of harvesting a debt crisis, our progeny could be endowed with the inheritance necessary for the challenges of the second half of this Century.


P.S. The Allan Carlson quote comes courtesy of the self-described at-home mom and Catholic writer Erica Walter.



Zingales Part II

Would you make economic policy with this man?
Photo Credit: Chris Lake

Here’s rest of my interview with Professor Zingales:

The theme of the solutions section of your book is utilizing market structures to regulate entities in the market. Which of your ideas do you think is most likely to be adopted? Why?

To be honest I think that none of my solutions is very likely to be adopted in the very near future. For a solution to be adopted, there must be a powerful group lobbying for it. A group will lobby only if it receives a disproportionate benefit. So in the current political dynamic only biased proposals, which greatly favor a group at the expense of everybody else, are likely to be endorsed and adopted. My proposals are balanced and fair. So it takes a change in the way politics is done for my proposals to have a chance. That is exactly the reason why I wrote the book, to create the awareness that the way politics is done should be changed.

 Why ban subsidies and what’s the alternative?

There is a perverse political dynamic in subsidies. The beneficiaries have great incentives to lobbying for them, hiring the most talented advocates to convince Congress and the public at large of the social benefits of these subsidies. The taxpayers are dispersed and disorganized and have no interest or resources to fight back in this battle, so they tend to lose all the time. Yet, whatever social benefit can be obtained with subsidies, can also be obtained with taxes on competing goods: a subsidy to corn syrup has similar effects on a tax on sugar. Targeted taxes, however, are very unappealing: they have the opposite political dynamic. The payers are very concentrated and powerful and the beneficiaries (the taxpayers) dispersed and powerless. That is the reason why I want to restrict government intervention to take the form of taxes rather than subsidies: it will occur less often and only when the social benefits are very large.

One criticism of your work would seem to be that if we don’t prop up our home grown businesses, then government supported entities around the world will out-compete ours. If other countries support their automobile manufacturers, why shouldn’t we?

It is a very dangerous argument many businesspeople use to justify their request for protection and subsidies. First, if other countries really resort to subsidies that alter competition we have a way to respond. The WTO agreements allow a country to introduce tariffs in response to “unfair” competitive practices, but the unfairness is to be assessed by international judges, it is not enough that is claimed by the local industry. Second, if taxpayers in other countries are subsidizing the products we buy, should we worry so much?

You conclude with a chapter on the difference between being pro-market and being pro-business and hold some hope that academics can push us in that direction. Is there a country that’s mastered this? Did their academic sector take a leadership role?

No country is perfect. European economists, who work in State-financed universities, tend to be pro-government intervention, not pro market. By contrast, American economists, who are more pro-market, tend to be too cozy with the interest of business. Yet, the more intense competition present in American academia fosters a healthy debate that favors pro-market solutions. Competition works the best when there is a level playing field. Public disclosure of economic data, including the regulatory decisions, is the best way to create this level playing field.

It’s a fun and highly recommended read, here’s the book:

Zingales Interview Part 1

Pratto della Valle
Padua, Italy
Hometown of Author/Economist Dr. Luigi Zingales
PetarM/Wikimedia Commons

I had the opportunity to interview University of Chicago Economics Professor Luigi Zingales recently.  His new book, A Capitalism for the People: Recapturing the Lost Genius of American Prosperity, does an excellent job defining the genius of America from an immigrant’s point of view.   It is not a common political book, but rather a serious, and seriously entertaining, discussion of what ails America and how to fix it.

Here’s Part 1 of the interview:

What is your hometown in Italy?  How’s that city weathering the European financial crisis?

I grew up in Padua. It is a fairly wealthy city that is weathering the crisis OK, but restaurants are half empty and people are worried.

How is your son and daughter’s monopoly game relevant to national prosperity?

As a kid, my daughter accepted the idea of losing at Monopoly as long as she trusted that the game was fair. Once she started suspecting that my son was “selectively enforcing rules” she gave up. This is what an increasing number of people are feeling. It is hard enough to support a system where we end up being the loser, it is impossible to do so when we perceive the system as unfair.

What does European soccer teach us about renewing the Bush tax cuts?

Soccer players, especially the best ones, respond to marginal tax rates in deciding where to play. Not surprisingly, Spain, who introduced lower tax rates for soccer players, has the best soccer clubs. This evidence suggests that we have to be careful in increasing the marginal tax rates too much because it might discourage the most talented people to come to America or push them to leave.

You make the point that firing bad teachers will help our GDP.  Why?

The quality of a country’s education is crucial to its success and growth. In theUnited Statesthe average quality of education is kept back by a subpar quality of the teachers. In particular, the worst teachers have long term consequences on the educational achievements of their students. Empirical studies suggest that firing the worst 8-10% of teachers would have a very large impact on the average quality of education of our children and hence on the country’s future economic prosperity.

How are small and mid-sized local and regional banks impacted by financial sector concentration and the resulting subsidies and bailouts for the biggest firms?

Large banks find it easier and cheaper to borrow on the capital market because investors expect the government to intervene and to rescue these banks (and shield investors from losses) in a crisis. This gives an unfair competitive advantage to big banks, distorting competition and hurting small ones.

It’s the rare book that gains respect and praise from liberal and conservative economists but Zingales has achieved something special and reading it will give you a welcome break from campaign rhetoric this election season.  Part 2 of the interview is coming soon, here’s the book:


A pi-ful of people

The U.S. Census has at least one employee too many.  They’ve noticed and sent out a press release to let us know they estimate that at about 2:29 PM on August 15, 2012, the:

“U.S. population clock will reach … 314,159,265 residents, or pi (3.14159265) times 100 million. Pi is a mathematical constant that is the ratio of a circle’s circumference to its diameter.”

And, by the way, we passed that threshold on automobiles quite some time ago.  Our means of transportation have long out-numbered us.