– October 29, 2019
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When you look at a set of quartz crystals, or a cross-section of a termite mound, you see order. But the order results from tiny individual agents — quartz molecules, and the way the bond, or termites, and the way they respond to pheromones and temperature — following simple rules. The point is that individual action, operating in unconnected and decentralized settings, can result in what appears to be a completely planned and hierarchically organized system.

As I have written before, this is widely accepted by folks across the political spectrum when it comes to the natural world. But it’s particularly true of people who are strident evolutionists when it comes to nature: they are almost always crude creationists when it comes to society.

What I mean is that acknowledging the power of decentralized, self-organizing complex systems like an ecology or a wasp’s nest, order without planning of any kind, in nature is common. But when it comes to public policy, the analogous decentralized, self-organizing complex systems are ignored, or scorned. Planners always think they can do better by starting over. “There has to be a process,” is their watchword, but they ignore the fact that there usually is already “a process”; it’s just not something they thought up and implemented from the top down.

Gifford Miller, candidate for mayor of New York: “There has to be a process that helps us move forward and make the best choices for a city’s future.” In a scene played out in hundreds of communities, the city of Fergus Falls voted down even hearing a proposal about a new development in 2016. Councilperson Wayne Hurley summarized the view of the “no” voters: “There has to be a process that all developers go through.” There was a debate recently in a small town outside Boston (I couldn’t find a link, but here is an image) over the pressing issue that “most fortune tellers are not licensed.” I guess there needs to be a process, right? I can’t imagine how that would work. But presumably the fortune tellers already know… 

History Is a Process

The notion of decentralized historical process, and permissionless innovation, is anathema to most elected policy creationists. They think the only rational process is one that results from the application of human reason, in a meeting — or more likely dozens of meetings — from which will emerge their secular deity, which they worshipfully call “The PLAN.”

A striking example of this kind of disastrous dismissiveness of the wisdom embedded in spontaneous, emergent processes is the saga of “Garbage City,” in Cairo, Egypt. In a process that happened slowly, without any plan or direction, and whose beginnings go back decades, a part of Cairo named Manshiyat — now more commonly called “Garbage City” — a system emerged. The system had several elements. 

First, the area was one that had been occupied for centuries by Coptic Christians, and is centered on the remarkable 15,000-seat “Cave Church,” or Church of St. Simon the Tanner, the one legitimate physical cultural resource this very poor population can claim. The church was built at various times, but the present set-up dates from the 1970s.

Second, in a process reminiscent of India’s caste system, the Copts have specialized in trash collection, for much of the 9+ million population of Cairo. They are called the “Zabbaleen,” or “garbage people,” even though only 15,000 or so of the 80,000 people living in Garbage City work directly as refuse collectors and traders. 

Third, the emergence of the system of urban garbage collection was not entirely voluntary. Manshiyat is a slum, no two ways about it. There were no jobs, and economic activity was rudimentary, when the large growth in population happened after World War II. Tens of thousands of Copts were forced off their land in Central and Eastern Egypt by economic discrimination and poor harvests caused in part by droughts and floods. The “choice” to begin to collect garbage and repackage and sell it was born of desperation. But over time an elaborate infrastructure grew, with increasingly specialized systems of sorting, classification, and delivery. Garbage and trash were removed from much of the city, transported by cart and truck to Garbage City, processed, and then delivered back to various locations in the city and elsewhere in the form of valuable resources. 

Fourth, a unique feature of Coptic culture enabled them to collect garbage, especially food and other compostable waste, at low cost. Muslims don’t eat pork, and in fact are not allowed even to be near pigs. But Copts had kept pigs for centuries. Pigs will eat almost any kind of food scraps, and so food wastes that would have been hard to dispose of otherwise were some of the most valuable “resources” for the Zabbaleen. This fact alone, the scouring of garbage all over the city for food waste before it had rotted completely, meant that the health and sanitation of the city was dramatically improved by Zabbaleen activity.

It’s hard to say if this is “recycling” or “reusing,” but as much as 90 percent of the rubbish collected by the Zabbaleen is sorted, collected in bunches, and resold. And the larger city received the substantial benefit of having its rubbish collected without any urban infrastructure, and with no levy on citizens for trash collection. I don’t want to claim the system was perfect, or comprehensive; the Zabbaleen were only collecting stuff they could use, so there was a lot of stuff left festering on the streets. Still, the opportunity cost of time for Zabbaleen families was very low, and human ingenuity applied at the margin over decades of infrastructure development meant that very elaborate systems of collection and distribution emerged.

Of course, none of this made sense to the planners of Cairo, living in planned, gated communities and many of them trained in urban planning schools in the U.S. or Europe. They decided that the idea of people making a profit violated ethical norms; after all, this is “our” garbage! Why should anyone make a profit on our garbage?

So, in 2004 these wise and highly trained professionals of the Mubarak government outlawed the private collection of garbage, and contracted with large multinational corporations. In short, they decided “there has to be a process,” and with a few keyboard strokes and the threat of force that backs up their plans wiped out the thriving system of garbage collection that had emerged over decades.

Of course, you can guess that the new “system” was pure garbage. The revenue was supposed to come from a levy collected from residents, but Egypt’s local state capacity for tax collection was nearly nonexistent. Corruption and administrative costs sapped most of what little revenue people were willing to pay. Festering garbage piled up on city streets, blocking intersections and spawning fires and an explosion of rats and insects. Food waste had no value to the paid garbage collectors, but leaving piles of it on the sidewalks had terribly damaging health consequences for the citizens of Cairo.

One observer put it this way:

Before 2004, Cairo residents paid the zabbaleen a monthly fee to collect waste. Under the formalised system, the four firms simply left large bins in the street, asked residents to deposit their waste in them, and made them pay for this supposed privilege through their electricity bills. “Of course, this was very stupid,” said Suzie Greiss, head of Egypt’s Association for the Protection of the Environment. “When you have very big high-rise buildings, people are still going to want collection.”

The zabbaleen ended up collecting much of the rubbish directly from the flats anyway, but for a quarter of the money they previously earned. Many residents felt they were paying the multinationals enough; as a result, they did not want to pay the zabbaleen as much as they had done previously, even though they did most of the work. To add insult to injury, the firms subcontracted a community of middle-men – the wahaya – to deal with some of the waste. But according to Greiss, the wahaya pocketed the money and left almost all the collection to the zabaleen. “It was a very unfair relationship,” she says.

The effect on the zabaleen, Iskandar says, was devastating. Eissa Habil Aramanyos, a 35-year-old zabal, reckons the move cost him 75% of his earnings. Before the change, he might have earned five Egyptian pounds (43p) from each flat. Afterwards, he got one or two if he was lucky; to make up the shortfall, he had to work longer hours over a much larger area….

Community leaders tried to persuade officials to use the zabaleen formally within the system, but they received a patronising response, said Ezzat Naem Guindy, head of the zabaleen workers’ syndicate, and chairman of Spirit of Youth, an influential local NGO. “Every time we tried to convince the government that the zabaleen worked hard and collected from the flats directly, the government said: ‘How can we contract them? They’re not formed into companies. They don’t pay taxes.'”

Isn’t that beautiful? The planners didn’t care at all that the spontaneous system had served citizens and the city well; what mattered was that there was “a process.” The idea that a service only exists if there is a formal plan, and a contract with the city, is a fascinating insight into the mind of the planner.

One final word, on something I am not saying. I’m not saying that the solution to urban problems is to say, “Let the market do it.” In a way, that’s what the Cairo planners were trying to do, contracting with large private companies. What’s important is to recognize that history is itself a process, and that the spontaneously emerging institutions, adapted to cultural constraints and the particular circumstances of time and place, are likely to be better than hierarchically imposed processes, whether it is state-run or an imposed market solution. 

We need to recognize that there is wisdom and value in the systems that develop spontaneously, rather than thinking we should always start over with some new plan. As Friedrich Hayek put it, in The Fatal Conceit:

Specialised students, even after generations of effort, find it exceedingly difficult to explain [market systems], and cannot agree on what are the causes or what will be the effects of particular events. The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.

To the naive mind that can conceive of order only as the product of deliberate arrangement, it may seem absurd that in complex conditions order, and adaptation to the unknown, can be achieved more effectively by decentralizing decisions and that a division of authority will actually extend the possibility of overall order. Yet that decentralization actually leads to more information being taken into account.

Michael Munger

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Michael Munger is Professor of Economics at Duke University and Senior Fellow of the American Institute for Economic Research. His degrees are from Davidson College, Washingon University in St. Louis, and Washington University. Munger is the author of Is Capitalism Sustainable? (AIER, 2019)
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