> The whole point of the price system is to allow society to communicate to entrepreneurs what is valued and what isn't.
Yes, but the whole premise of the venture-capital scene is that the price system is inefficient. =] That is, there are places where you can put in $10m and get $100m out, because you find an area of potential production that just needed a catalyst.
I see cities as more or less trying to do the same thing; they want to find a way to provide a catalyst to local businesses that will pay for itself 10x over the next N years. May or may not work, but nothing in the market precludes it from being possible (the main reason for it not to work is just that city bureaucrats are bad at it, partly due to the political situation they operate in).
Yes, but the whole premise of the venture-capital scene is that the price system is inefficient. =] That is, there are places where you can put in $10m and get $100m out, because you find an area of potential production that just needed a catalyst.
I see cities as more or less trying to do the same thing; they want to find a way to provide a catalyst to local businesses that will pay for itself 10x over the next N years. May or may not work, but nothing in the market precludes it from being possible (the main reason for it not to work is just that city bureaucrats are bad at it, partly due to the political situation they operate in).