Traditional market analysis is based on profitability and ignores social and environmental values. For instance, ETSY offers a platform to connect individual designers, artisans, and artists to customers. This does a huge social service to our society by improving quality of life and helping a group that is generally undervalued. Electric cars will make our environment more green. Most electric car makers are not making money yet, but they need capital to research the technology and expand production. How could measures like Earnings per share (EPS), Price to Earnings (P/E), Price to Sales (P/S), or Return on Assets (ROA) capture their true value to society?

A stock may have an “intrinsic” value calculated based on those measures of profitability. Supply and demand can drive price change in the short term. And many other factors, including small pieces of rumor, could instantly make waves. But the price of a stock is really an aggregate of what all investors are willing to pay on average for a piece of the company at a given time. Naturally, we expect valuation changes in different situations. It makes perfect sense that ZOOM is richly valued during the pandemic – it keeps workplaces going and connects socially isolated people, and therefore provides an extremely important service to society. Maybe stock prices have always included some other values (not easily quantifiable) than pure profitability, just like commodity prices in the real market.

If we think what eventually settles, more or less, on a stock’s price reflects a consensus among investors on how much the company should be valued, stock prices may well reflect society’s dominant value system. Then, the participation of young people could make positive change to the stock market by bringing social and environment values into stock pricing – because they do care more about such values. They are also tech savvy and are more willing to invest in risky innovative technologies, where capital is truly needed, and what stocks are supposed to be about. It is all for good.

(I agree with them: what’s the point to invest in Dominion Pizza? Or even the FAANG – they have already grown up. It’s simply boring to buy Chase Bank stocks.)

The future belongs to the young, and they will determine dominant values in the future. The stock market can be a vehicle for them to shape the future and make change. I hope they will be investors not speculators. Even if you like gambling, it cannot go wrong to bet on the future.

The United Nations has been pushing sustainable development for a long time that includes social and environmental measures. But it is hard to internalize these values in action as we are so entrenched in a capitalism mentality that money is everything.

Under this perspective, “overvaluation” of companies that provide innovative products/services, particularly those bringing positive social and environmental values to society, may be justified. We need a new sort of market analysis.

If we think mix in terms of leaving different things/parties there to interact, and match in terms of interacting in “right” ways, mix-and-match may well be a universal principle for sustainability.

Let’s begin with the second law of thermodynamics. It essentially says: the energy of a system diminishes without external input and will eventually “die.” That’s why biological bodies, including us, all expire some day, and physical entities like buildings deteriorate over time.

But this law is not that universal, and systems can sustain themselves and keep in existence. In complex adaptive systems, extra “energy” can be produced from interactions between the parts within a system. And this “creativity” from within can sustain a system. This is why a city can persist and prosper though its buildings, infrastructures, and inhabitants age and change.

It is not guaranteed that interactions in a complex adaptive system always generate “positive energy.” Interactions can go “wrong” and produce “negative energy,” accelerating a system’s demise. Sometimes, we make dishes that we don’t even want to eat, and we simply waste some good vegetables or a piece of fine meat. There are fashion flops even among Hollywood celebrities. Some cities do decline looking badly distressed in a dissonant mess.

Now let’s see how our universal law of creativity and sustainability apply to other complex adaptive systems. Nature provides the best examples. In a rainforest, for instance, species and populations interact in a range of mutually beneficial ways that lead to more efficient utilization of lights and nutrients and abundant life in an impoverished soil. To be sure, the process of mix-and-match is long. In the end, only those who can mix in have survived. Together they create niches for themselves and the carrying capacity of an ecosystem in a biophysical place. Mix-and-match continues as the system undergoes change amid disturbances of different sorts.

Human relationships and social groups, too, follow the law of mix-and-match. For any relationships to flourish, participants must have something to offer and obtain something that each cannot have individually. Children are the most concrete creativity of a couple. When you walk away feeling elated or inspired after talking to somebody, you will naturally want to stay in this friendship. For members to keep participating in group activities voluntarily, they need to feel at least they are getting something satisfying out of the community.

Of course, relationships can wane and social groups disappear over time and often – when they lack or lose creativity. We may use institutions like marriage to bind a couple and participation rules to try to keep a group going, but those truly vibrant relationships and groups exhibit creativity and don’t need any oath on paper or oral. Actually, whenever institutions or rules are needed, it suggests something that is likely unsustainable naturally.

Other complex adaptive systems – markets and the economy, societies, nations, civilizations – all have their own mix-and-match processes. With right interactions among their parts, they function smoothly, but when interactions go wrong, we can get market failure and even collapse of civilizations. Nations rise and fall mostly following mix-and-match/mismatch among elite groups and between the elite and the mass.

Life must have first emerged from mix-and-match of nonliving chemicals. Individuals die and species go extinct, but life sustains itself with new forms of life that emerges from mix-and-match of older forms.

The technology system does not only sustain itself but also grows nonlinearly because mix-and-match of older building blocks gives rise to new technologies. To find out exactly how, read Brian Arthur’s The Nature of Technology: What it Is and How it Evolves.

And how do we get new ideas? Mix-and-match of old ideas. Nothing is really new. Einstein made a genius connection between Maxwell’s equation on the light in a vacuum and Max Planck’s constant dealing with energy quanta. You may read Douglas Hofstadter’s writings on creativity and metaphors. What are metaphors? Mix-and-match of seemingly unrelated things. The wider an association, the more ingenious an idea.

But we don’t mix and match here: the brain does it. Our brain is a mix-and-match master, capable of magic. It mixes and matches at a deep level of neurons. Our job is to “put” stuff in neuron circuits and “build” connections between them. The rest is largely out of our control: the brain is self-sustained, bringing to life dreams, imaginations, and ideas. It’s our lifetime’s job to serve the brain – by means of action and habit and through experience.

The most revolutionary ideas, Turing’s computing machine, for example, are not the product of hard thinking. Thinking is deductive reasoning in a closed system, but the universe around us is infinite. That’s why Pascal, a firm believer of scientific method, was also a doubter of reason. We need intuitions, the brain’s magic, to break through existing systems to get into new territories. The great Descartes, who famously said “I think, therefore I am,” had to agree with young Pascal.

I have wandered a bit in the forests. And I can go on and on. Human environment systems, the global economy, international relations…

To come back to the key note, a complex adaptive system can break the second law of thermodynamics and sustain its existence if it exhibits creativity from right interactions among its parts, while wrong interactions produce negative energy and bring the system faster to demise.

I feel inclined to include a coda. Implied in mix and match is also diversity. Diversity is conducive to creativity. How would you expect to see new ideas out of a mix of same mindsets? If you want to know more about the role of diversity, check out Scott Page’s The Difference: How the Power of Diversity Creates Better Groups, Firms, Schools, and Societies.

The social psychologist Stanley Milgram’s famed small-world experiment was inspired by a game Jane Jacobs played with her sister when they first moved to NYC and felt isolated in the big city. The macroeconomist Robert Lucas who won the Nobel Prize in 1995 had long admired Jane Jacobs’s work.

In fact, each of her books challenged mainstream thinking, and there is so much we can say about Jane Jacobs and her ideas that I have to be “an impressionist.”

The Economy of Cities opens with a chapter titled Cities First – Rural Development Later. After describing in detail how an imagined city New Obsidian emerged as a trading center of importance, she wrote:

“The food of New Obsidian is derived in two ways. Part of it comes from the old hunting and gathering territory—which is still hunted, foraged and patrolled as diligently as it formerly was when the people were solely hunters and gatherers—and from the territories of the volcano-owning groups whose headquarters arc now also at New Obsidian. But a large proportion of the food is imported from foreign hunting territories. This is food that is traded at the barter square for obsidian and for other exports of the city. Food is the customary goods brought by customers who do not pay in copper, shells, pigments or other unusual treasures. Wild food of the right kind commands a good exchange. In effect, New Obsidian has thus enormously enlarged its hunting territory by drawing, through trade, upon the produce of scores of hunting territories. The right kind of wild food to bring to the barter square is nonperishable. Except in times of great shortage and unusual hunger when anything is welcome, only nonperishable food is accepted. There are two reasons for this. First, unless the customers are from territories very nearby, nonperishable food stands the trip to the city best. Second and more important, the people of New Obsidian like to store the food and mete it out rationally rather than gorge upon it and perhaps go hungry later Thus the imported food consists overwhelmingly of live animals and hard seeds. In this New Obsidian resembles all pre-agricultural settlements that import wild food. Because of New Obsidian’s unusually voluminous and extensive trade, large quantities of live animals and seeds flow into the city. The animals are trussed up or carried in pole cages if they are dangerous. They are hobbled with fiber rope and alternately carried and driven on their own feet if they are not dangerous. Nonperishable plant food is easier to handle than animals, and traders carrying it can travel more swiftly. Thus, especially from the greater distances, beans, nuts and edible grass seeds pour into New Obsidian. The imported food promptly enters New Obsidian’s local economy and there it comes under the custody of local workers who specialize in its protection, storage and distribution. They are, in effect, stewards: stewards of wild animals and stewards of edible seeds. Consider, first, the duties of the animal stewards. In principle, their work is the not very difficult task of keeping the animals alive until it is time to slaughter them. This does, however, require judgment. The first animals chosen for slaughter are those that are either the hardest to feed or the most troublesome to manage, or both. Most carnivores fall into one or both of these categories and they are eaten very soon after their arrival in New Obsidian. The craftsmen get the pelts and other by-products. Animals that can live on grass are removed last from the natural refrigerator of life. And among the grass-eating animals, the females, being the less rambunctious, are kept longest. Sometimes they give birth to young before their time of slaughter comes; and when this happens there is, of course, extra wild meat and extra pelts The animal stewards of New Obsidian, with their unusually large supplies of meat to pick and choose among, make it a practice to save these docile breeders whenever they can. They have no conception of animal domestication, nor of categories of animals that can or cannot be domesticated. The stewards are intelligent men, and are fully capable of solving problems and of catching insights from experience. But experience has not provided them yet with any idea that can be called “trying to domesticate animals.” They are simply trying to manage the city’s wild food imports to the best of their abilities. The only reason that second, third or fourth generation captives live long enough to breed yet another generation is that they happen to be the easiest to keep during times of plenty. Indeed, over and over, third and fourth generation captives are killed off without a qualm if the food is needed. But the stewards make an effort to keep fresh meat always on hand, and, in particular, always to have some for the happy and exciting occasion when a party of New Obsidian traders returns from afar, weary, hungry and eager for welcome. And eventually, the stewards manage to keep fresh meat on hand permanently. They come in this way to possess, and to protect most carefully, what we would call breeding stock. But such animals mingle with imported wild stock that will not harm them, including different varieties of their own species. And among the offspring those that stand captivity best are, by definition, the best survivors and best meat producers on the forage at hand. Among these, the most docile are always kept by preference. In New Obsidian, it so happens, the animal stewards concentrate especially upon saving and multiplying sheep—mainly because sheep meet the requirements of convenient maintenance and their meat is as well liked as any. Also, the craftsmen particularly value their pelts. In another little city with which New Obsidian trades, imported wild goats are being kept by preference because they thrive on poor provender. In still another, from which New Obsidian buys copper, wild cattle are being kept because the females are sufficiently docile and because the craftsmen regard the multiplication of horn to be especially desirable. Far in the western part of the trading belt, wild sows are being kept by preference because they can be pastured in forests and because they yield such splendidly large litters. The seed stewards of New Obsidian have no reason to prefer saving one kind of barter seed over another, and they do not do so. The dry seeds taken in trade are all mingled together in storage and are also eaten as mixtures. Seeds of many, many different kinds of wild grasses flow into the city from wet soils and dry, from sandy soils and loamy, from highlands and from valleys, from riverbanks and from forest glades. They come from the territories of scores of tribes who do not harvest in one another’s territories except during war and raids—when the raiders eat quickly what they have seized. But here in New Obsidian, the world’s best market for edible wild seeds, the seeds flow together for storage. Seeds that have never before been juxtaposed are tumbled into baskets and bins. Husked, pounded and cooked, they are often further jumbled with peas, lentils and nut meats. When seeds remain after the winter, they are used for wild patch sowing, a practice not productive of much food; it just makes gathering wild seeds more convenient In and around the barter space, around the storage bins within the city, and in the yards where women husk and pound and carry seed to and from the household bins, some seeds spill. Whether spill sown, patch sown, or sown by little predators—rats, mice and birds—these plants cross in unprecedented combinations. It is no problem to get grain crosses in New Obsidian, or crossed beans and peas either. Quite the contrary; crosses cannot be avoided. The crosses and hybrids do not go unobserved. They are seen, in fact, by people who are experts at recognizing the varieties and estimating the worth of barter seeds, and who are well aware that some of these city seeds are new. Mutations occur no more commonly than they would in the wild, but they are not unnoticed either, as they most likely would be in the wild; nor do occasional batches of mutant seeds brought in barter go unnoticed. But crosses, hybrids and the rare mutants are not deliberately put to use in selective breeding. Barter-seed stewards do not have custody of locally grown seeds, no more than the stewards of imported animals have custody of meat killed by the hunters of New Obsidian itself. It is not the seed stewards who make the first selections of new grain plants. Some of the householders of New Obsidian take this step, and they do it at first inadvertently. Selection happens because some patches of sown seeds yield much more heavily than other patches do. The particular household bins filled from the lucky patches are, more often than not, the bins with seed left for sowing, in years when seed is saved for that purpose at all. The unprecedented differentials in yields from New Obsidian’s best and poorest seed patches lead to an arrangement formerly unheard of: some people within the city trade seeds to others. That is, they make a business of handing out seeds in return for trinkets. Possibly this trade is confined to the women. It is not as radical an arrangement as their ancestors would probably have thought it, because the people inside the city who engage in this practice are modeling their transactions upon the barter that has long gone on in the city square. Owing to this local dealing in seeds from patches that yield most heavily, all the grain grown in New Obsidian eventually yields heavily in comparison with wild grains. The people of the city do not really know why their grain is “the best,” but they know that it is. And in the second stage of the process, selection becomes deliberate and conscious. The choices made now are purposeful, and they are made among various strains of already cultivated crosses, and their crosses, mutants and hybrids. It takes many generations—not just of wheat and barley but of people—to differentiate the New Obsidian seeds into sophisticated cultivated grains. But it is only under the following conditions that the thing could have happened at all: 1. Seeds that normally do not grow together must come together nevertheless, frequently and consistently over considerable periods of time. 2. In that same place, variants must consistently be under the informed, close observation of people able to act relevantly in response to what they see. 3. That same place must be well secured against food shortages so that in time the seed grain can become sacrosanct; otherwise the whole process of selective breeding will be repeatedly aborted before it can amount to anything. In short, prosperity is a prerequisite. Although time is necessary, time by itself does not bestow cultivated grains on New Obsidian. Gradually, New Obsidian grows more and more of its own meat and grain but it does not, as a consequence, wallow in unwanted surpluses of imported food. First, the very practice of growing foods in new ways requires new tools and more industrial materials. The population of New Obsidian grows and so does the work to be done in New Obsidian. The city’s total food supply is made up of its own territorial yield of wild animals and plants, its imports of wild animals and seeds, and its new home-grown meats and grains. The total increases but the imports decrease as the new city-made food greatly increases. (The city’s own traditional hunting territory probably yields about the same amount as in the past.) The city, in short, is now supplying itself with some of the goods that it formerly had to import. In principle, this is not much different from importing baskets and then manufacturing them locally so they need no longer be imported. Since New Obsidian had formerly imported so much wild food—in comparison to baskets or boxes, say—the substituted local production makes a big difference in the city’s economy. In place of unneeded food imports, New Obsidian can import other things—a lot of other things. The effect is as if the city’s imports have increased enormously, although they have not. The city, instead, has shifted its imports from one kind of goods to other kinds. This change radically changes the economies of the people with whom New Obsidian trades. Now people from ordinary hunting tribes who come for obsidian find that ordinary industrial raw materials from their own territories—furs, hides, bundles of rushes, fibers and horn—are much welcomed in barter, while pouches of grass seeds and exhausted, scrawny live animals do not command the obsidian they once did. Now too the traders of the city itself go forth ever more frequently to points ever more distant in search of exotic materials for the city’s craftsmen. And the things that the craftsmen make of the new wealth of materials pouring in amount to an explosion of city wealth, an explosion of new kinds of work, an explosion of new exports, and an explosion in the very size of the city. The work to be done and the population both increase rapidly—so rapidly that some people from outlying tribes become permanent residents of the city too. Their hands are needed. New Obsidian has experienced a momentous economic change peculiar to cities: explosive growth owing to local production of goods that were formerly imported and to a consequent shift of imports. The traders of New Obsidian, when they go off on their trips, take along New Obsidian food to sustain themselves. Sometimes they bring back a strange animal, or a bit of promising foreign seed. And the traders of other little cities who come to New Obsidian sometimes take back food with them and tell what they have seen in the metropolis. Thus, the first spread of the new grains and animals is from city to city. The rural world is still a world in which wild food and other wild things are hunted and gathered. The cultivation of plants and animals is, as yet, only city work. It is duplicated, as yet, only by other city people, not by the hunters of ordinary settlements.”

I find this rich depiction of how crop cultivation and animal domestication started at and spread from a trading center immediately appealing and illuminating.

Was it indeed that cities were the origin of agriculture? It’s still under debate. Jane Jacobs modeled New Obsidian on the archeological site Çatalhöyük. New archeological studies based on isotopic analysis show that humans didn’t become sedentary agriculturalists within a short period – it was very gradual. The same was also true for cities. It’s utterly believable that some levels of human concentration were necessary for cultivation of plants and animals to begin in a place, and it could well be that cities and agriculture coevolved. It also depends on the definition of cities: how large a settlement is qualified to be a city.

What’s really important is her imagination and intense observation which allowed her to look into HOW things work at the micro level and led to fresh insight. Of course, we have been so used to linear thinking which conditioned our way of looking at the world as a linear progression: from hunter gather groups to agricultural society and then urban and industrial society. But this linear way of thinking and looking, often defined by disciplinary paradigms, leads to narrower paths and prevents us from making breakthroughs in some important subjects.

In spite of being a champion of cities, it’s Higgins, a small place in the Great Smoky Mountains in North Carolina, that Jane spent 6 months in her youth that has stuck on her mind, driving a lifetime intellectual pursuit of economics. She was haunted not by the beauty of the mountains but the poverty and generational decline there: how could a tragedy like that happen?

Jane Jacobs, a high school poet and a self-described “outlaw,” took courses on a wide range of topics at Columbia University, though she didn’t receive degrees. Her professional career started as office secretaries who typed as dictated – typical of women’s work at that time. The mother of three biked through town from her home in Greenwich Village to work – cycling was not fashionable then as it is today. Her first book was Constitutional Chaff – Rejected Suggestions of the Constitutional Convention of 1787, published twenty years before Death and Life. The last book she contemplated writing was A Brief Biography of the Human Race. (For a fine picture of her life, look at Eyes on the Streets.)

Imagine you need to get out of town in the morning and suddenly find your car stuck at an intersection with the entire traffic flowing against you, or your watch is somehow not perfectly synchronized with the police’s time. It is not just confusion: there have been lots of safety complaints and reports of accidents during lane direction reversal hours. Considering the city’s multi-modes of mobility, no wonder many of the accidents involved non-vehicle users and pedestrians. (One of the great things about the city is it is walkable and friendly to alternative transportation tools.)

Why does DC do such a crazy thing? The answer is simple: to lessen traffic congestions. Many of those who work in the District live in the suburbs; lane direction reversals are designed on major roads that connect MD and VA to the District to facilitate non-DC residents commuting between office and home. The long commutes are nonetheless not pleasant and are also a source of CQ2 emissions.

Now there is an opportunity to fix this problem. If post-pandemic demands for office spaces will decline with some employees likely continuing to telework as it has been predicted, the vacant office buildings can be converted to residence so that more people can live near work. The benefits are multi-folds: reduce commute time, traffic jams, and CQ2 emissions, and possibly lower rent, increase affordable housing units and improve quality of life in general. Good for both people and the environment.

What’s more, we will have a more vibrant and resilient downtown. That mixed use is an essential ingredient for urban vibrancy is not a new argument – it’s a brilliant idea of Jane Jacobs. Mixed business and residential areas are not only more vibrant but also more resilient.

Here are some of the observations from my frequent, extensive walks in town during and before the pandemic. In residential areas with lots of businesses (most of which are service oriented), Georgetown and the 14th St Corridor, for instance, businesses quickly bounced back, and these neighborhoods have been bustling with life soon after the initial lockdown was lifted. The downtown business district where office buildings dominate was hit the hardest and has remained most quiet. Restaurants and other service businesses are yet to reopen, while waiting for their customers, who are mainly employees working in those office buildings, to return. Similar patterns have been observed in New York City.

Many are now scared by the Coronavirus and have developed the perception that cities are bad places during a pandemic. This is mistaken: what matters most is behavior. Conscious citizens that are willing to learn and adapt and have other people’s safety in mind hold the key to curbing pandemics. Chinese cities are all densely populated. True, the government placed strict restrictions. Also important however were extreme precautions taken by individuals. Villagers voluntarily guarded the entrance to their villages, and residents in cities watched in their neighborhoods those who were supposed to quarantine at home. The pandemic could be curbed by simple measures of mask wearing, social distancing, and hygiene practice. Prompt small-scale local lockdowns might be implemented when necessary. It has become more evident that we may not have a (quick) return to zero covid; this makes behavioral adaption more relevant.

Can cities survive the current social unrests and rising crimes amid the pandemic? Some of the ills such as racism and hate crimes have deep historical roots, but economics has always been a part and increased inequality an amplifier. The pandemic worsened economic conditions for some exacerbating the situation and thus provided a convenient outlet. A viable urban economy should help but equitable access is equally important. That mixed resident and business areas are more vibrant and resilient has much to say about poor neighborhoods as well: they have an opposite problem from that of the business district. Getting businesses to develop and grow is the key to vitalize these neighborhoods and to effectively address intraurban inequality.

The District does have special business incentives targeted at less developed neighborhoods and a well-articulated, comprehensive plan for sustainable development in which equality is an objective. It takes time and perhaps needs more efforts to make all these realized.

Mass shootings did not all occur in New York City, Los Angeles, Chicago, Houston, and Phoenix. We may also ask: where are those white extremists and the US Capital rioters mostly living? And where is the opioid crisis most prevalent in the country? You can search online to find out where greater proportion of people were put in jail. Cities are where things are happening; what’s happening in cities, good and bad, naturally draws more attention.

There is a bright future in store for Downtown DC as the pandemic winds down. A city can tackle any issues, social or environmental – if its citizens are open to change, recognize their collective future and care about each other, besides sound governance.

Sorry for an excursion below.

Cities will and must come back. If great cities are doomed, we will all be doomed – just look back at European Dark Ages. It is when Greek cities emerged from the Mycenaean civilization’s collapse (Geek Dark Age) and flourished that Western culture got its foundation, and later the Renaissance in Western Europe began with Italian cities.

It may look like that human capital has become more decentralized in the internet age, but cities, especially big cities, are still where human activities concentrate and where synergies (increasing returns) are present. Cities are and will continue to be the most significant driving force for innovation – not just in technology but in all fronts of culture.

Indeed, this has been happening. The urban-rural divide and widening gap in culture – related to but more than economic inequality – is a great danger for America.

No rosy future for some while others are left far behind no matter in a city or the country. All Americans need to recognize a common future and learn to care about others so to move forward together and keep up with the mighty wheel of technological advances that have led to and will continue to create great economic transformations.