—John Gardner, in Excellence (1961)

Economists do not understand what drives productivity growth very well. However, we know these facts: productivity grew rapidly after the second world war and then sometime between the late 1960s and mid-1970s it slowed dramatically only to re-accelerate to record levels in the mid-1990s. Unfortunately, even before the downturn, underlying productivity growth appeared to be slowing.

The most plausible explanation is that an array of transforming investments and technologies – the interstate highway system, widespread air travel and the expansion of electronics – were spurs to growth during the postwar period. Eventually their impact dissipated and, as energy costs rose, growth slowed until the information technology revolution kicked in during the 1990s. Unfortunately, the IT supply shock that powered the economy in the 1990s and early part of this decade appears to be diminishing.

So there is a need to ensure that the pressure to increase spending is directed at areas where it will have the most transformational impact. We need to identify those investments that stimulate demand in the short run and have a positive impact on productivity. These include renewable energy technologies and the infrastructure to support them, the broader application of biotechnologies and expanding broadband connectivity, an area where the US has fallen behind.

The crisis has also reminded us of the lessons of the technology bubble, Japan’s experience in the 1990s and of the US Great Depression – that finance-led growth is problematic. The wealth and income gains from the easy availability of credit were highly concentrated in the hands of a fortunate few. The benefits also proved temporary. In retrospect, the fact that 40 per cent of American corporate profits in 2006 went to the financial sector, and the closely related outcome – a doubling of the share of income going to the top 1 per cent of the population – should have been signs something was amiss.

The Blue Ridge Parkway winds along the ridges of the Appalachian Mountains, skirting Asheville and Roanoke above the hidden hollows and little towns. And on Thursday afternoon, thanks to Bayerische Motoren Werke, three friends and I were driving along the parkway, scattering wild turkeys left and right, carving turns and going flat out on the straightaways in a BMW 335Ci convertible. It seems that BMW periodically turns up at upscale resorts to let the (presumably free-spending) guests try the company’s cars for free, for no obligation beyond the painful duty of returning it at the end of the drive. We were attending a conference at a such a location, already stretching the limits of our decidedly middle-class budgets, at just the right time. After filling out a surprisingly informal questionnaire, the keys were ours and we were off.

As we gasped and laughed at the difference between our borrowed joyride and our real-life cars (as the owner of a base-model 2000 VW Passat, I have the most fly car of the bunch), we were well aware of several layers of irony. Down in the valley motorists were waiting in long lines for scarce gasoline at the stations that were open at all, due the supply crunch in the Southeast following Hurricane Ike. We, meanwhile, were burning gas like it was going out of style (which, come to think of it, it soon may). Then there was the improbable identity of the four merry riders: all of us activists in the growing environmental movement within evangelical Christianity, concerned not least with the reality of and remedies for human-induced climate change. That climate change is caused in part, of course, by the carbon dioxide that we were gleefully generating every time the Beemer let out a particularly gratifying growl. Let’s just say there was a hint of guilt in the pleasure.

Monderman certainly changed the landscape in the provincial city of Drachten, with the project that, in 2001, made his name. At the town center, in a crowded ­four-­way intersection called the Lawei­plein, Monderman removed not only the traffic lights but virtually every other traffic control. Instead of a space cluttered with poles, lights, “traffic islands,” and restrictive arrows, Monderman installed a radical kind of roundabout (a “squareabout,” in his words, because it really seemed more a town square than a traditional roundabout), marked only by a raised circle of grass in the middle, several fountains, and some very discreet indicators of the direction of traffic, which were required by ­law.

As I watched the intricate social ballet that occurred as cars and bikes slowed to enter the circle (pedestrians were meant to cross at crosswalks placed a bit before the intersection), Monderman performed a favorite trick. He walked, backward and with eyes closed, into the Laweiplein. The traffic made its way around him. No one honked, he wasn’t struck. Instead of a binary, mechanistic process—stop, go—the movement of traffic and pedestrians in the circle felt human and ­organic.

A year after the change, the results of this “extreme makeover” were striking: Not only had congestion decreased in the ­intersection—­buses spent less time waiting to get through, for ­example—­but there were half as many accidents, even though total car traffic was up by a third. Students from a local engineering college who studied the intersection reported that both drivers and, unusually, cyclists were using ­signals—­of the electronic or hand ­variety—­more often. They also found, in surveys, that residents, despite the measurable increase in safety, perceived the place to be more dangerous. This was music to Monderman’s ears. If they had not felt less secure, he said, he “would have changed it immediately.”

Very few infrastructure details begin with the idea that they will last 1,000 years. Strange as it sounds it is very likely that some basic software running inside computers  today will be running in computers 500 years from now. We see that conservation in cells, where very primitive metabolic cycles present in archaic cells are still operating in cells today. All the fancy “recent” improvements run upon them. One could imagine that in 5 centuries, parts of unix will be found operating in servers.  But it is clear that no one would be more surprised than the creators of unix. Most creations, including software, are written in less than optimal conditions. Creators always have the idea that they will go back later to fix the many known imperfections. Of course they are never fixed because the shipped rev is “good enough” — and so the temporary good enough becomes a permanent good enough.

A group of frustrated neighbors in the Dutch city of Delft finally got fed up about autos speeding down their street. One night, they dragged old couches and tables into the middle of the road, strategically arranging them so that motorists could still pass—but only if they drove slowly. The police eventually arrived and had to admit that this scheme, although clearly illegal, was a good idea. Soon the city was installing its own devices to slow traffic, and the idea of traffic calming was born—an innovative solution now used across the globe to make streets safer.

—Culture Making, p.28

A video clip of La Paz, Bolivia’s crossing guard zebras, the Cebra Voluntaria. Traffic in La Paz is so dangerous that its mayor started a program to have youths dressed as zebras help people across the city’s busiest intersections. From the recent issue of Monocle:

It doesn’t get much busier than La Paz’s Plaza San Francisco of a Friday afternoon. Two zebras stand on the curb chatting with a teenage girl. Then something remarkable happens: the traffic light turns red, and at the sight of the zebras, the cars actually stop. One driver, however, is a little slow and the nose of his car is left hanging over the crossing. One of the zebras skips over to the offending car and mimes pushing it backwards. Then he continues skipping across to the other side of the street.

Steve Gifford has found a bright side to living next to an eyesore—in his case, Congo’s former embassy. In exchange for Gifford and his partner spending $200 a month cutting the grass and cleaning up, Congo granted that most elusive of city perks: parking in the embassy’s driveway. “Everybody wins,” Gifford said.