Thursday, March 21, 2013

Antifragility in a fragile town

I  find in Taleb's new book Antifragility strong support for what I've been observing in Chinatown. The Asian American Federation study a few years ago found that East Broadway was one of the few sub-economies that was not harmed by 9-11. The older Toisanese commercial storefronts took a tough hit. Many closed. But not East Broadway. Why? Because East Broadway serves the local, recent immigrant Fujianese residents. They don't rely on tourism.

Chinatown was booming when residents, who mostly worked in Chinatown, would shop in Chinatown and ate in Chinatown, until the garment industry mostly dried up. But the Fujianese community still has that economic strength, driven by recent immigration. The glut of labor there depresses wages, but the high savings rate deflates prices, so they cancel out for the residents, and the high volume bolsters the local commerce. The threat to this balance is housing. That's where tenants advocates like CAAAV are essential to the overall well being of the neighborhood. 

Human beings are resilient -- antifragile. Tourism speculation and development schemes are extremely fragile. You see it in "developer's blight" -- the developer demolishes a building, digs a trench, then loses financing and leaves a big, empty, useless sore. You see it when tourists decide to go to China rather than visit the narrow sidewalks of Mott Street. Tourism is a trend, a fashion. It doesn't take a 9-11 to shut it down. It sways with the weather. But local residents have daily needs, and daily energy. They are the deep well of stability. When they leave, Chinatown leaves unless new immigrants replenish the resource. 

Chinatown has always been a dual community -- partly a clearing house for immigrants who live inexpensively, saving until they can move out of Chinatown to buy property of their own elsewhere; partly a community that has taken roots buying property within Chinatown. The latter community has become more fragile lately, threatening their sustainability, yet it's just as much part of the character of Chinatown. The new BID is intended to support that community, but it's an additional tax burden, and so you have to wonder who is the real beneficiary of the BID, the local community, or the banks that profit from the local commerce and will profit regardless who owns the properties or the businesses.

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