At the heart of Jane Jacobs’ The Economy of Cities is a simple idea: cities are the basic unit of economic growth. Our prosperity depends on the ability of cities to grow and renew themselves; neither nation nor civilisation can thrive without cities performing this vital function of growing our economies and cultivating new, and innovative, uses for capital and resources. It’s a strikingly simple message, yet it’s so easily and often forgotten and overlooked.
Everything we have, we owe to cities. Everything. Consider even the most basic goods: the food staples that sustain life on earth and which in the affluent society in which we now reside, abound to the point where obesity has become one of the leading causes of illness. Obesity sure is a very real problem and one we ought to work to resolve (probably through better education and cutting those intense sugar subsidies). Yet this fact alone is striking! For much of mankind’s collective history, the story looked very different: man (and it usually was a man) would spend twelve or maybe more hours roaming around in the wild to gather sufficient food to survive. Our lives looked no different to the other animals with which we share the earth. An extract from The Economy of Cities:
‘Wild animals are strictly limited in their resources by natural resources, including other animals on which they feed. But this is because any given species of animal, except man, uses directly only a few resources and uses them indefinitely.’
What changed? Anthropologists, economists, and historians will tell you it was the Agricultural Revolution, which occurred when man began to settle in small towns and cultivate the agricultural food staples that continue to make up the bulk of our diet: wheat, barley, rice, corn, and animal food products. But this merely raises another question: how did the Agricultural Revolution that took place ten millennia ago come into being? Jane Jacobs’ (very compellingly argued) answer is that we’ve got it all backwards: the city is what makes civilisation possible. Agriculture, and everything that proceeded from it, is merely an export of the city, just like the factories, automobiles, and microchips which first arise in cities and are then spun out into a region’s wider territory.
Here’s how it might have happened: at some point in the distant past, the world was parcelled up into territories controlled by various packs of hunter-gatherers. But hunter-gatherers need tools to hunt. Those tools, in turn, are produced by a couple of basic commodities: at first primitive stone tools, then increasingly complex spears made from obsidian and glass, and finally weapons made with copper and iron. As our tools became increasingly complex, their production necessitated resources obtained from particular locations – not available everywhere by obtainable through trade. Hence the rise of the world’s first cities: places where people would come together and barter for those primary sources of production, necessitating permanent civilisations. The surplus from trade, captured and enabled by the city, could then be allocated to new and innovative uses of labour.
Animals, for example, were held for the local trading population, at first for immediate consumption, but then it made sense, as the surplus increased, to breed them in new and innovative ways. Hence the rise of animal agriculture – first in cities, then as land became more valuable, spun off into the surrounding countryside. So too for the seeds which led to plant agriculture: initially for immediate consumption, their storage (and the surplus entailed) permitted experimentation with cross-pollination and paved the way for more advanced plant agriculture. Agriculture, Jacobs shows us, was perhaps the very first significant export spun off from cities!
Jacobs herself notes the idea is surprising, for it completely reverses the typical chain of cause-and-effect that we are so familiar with and that comes so intuitively. After all, in our everyday observations, it is rural areas which become developed into cities, hence why we might believe that first came agriculture. But this cannot be the case: further archaeological research has indeed confirmed Jacobs’ theories, showing that large-scale urban centres in Mesoamerica and Mesopotamia (see the example of Göbekli Tepe) preceded the agricultural revolution. Civilisation, made possible by the agricultural revolution, quite literally emerged with the advent of the world’s first cities.
The striking thing is that this is still the case today. Just like in the earliest cities, which permitted innovation when new work was added to old work and advancements in technique were made – quite literally creating new industries and products through the experimentation that surplus permits – cities continue to be the base of all human innovation and ingenuity. For it is in the city that ideas permeate most effectively, that humans collaborate and learn from one another, building on previous knowledge and success.
For new firms to start, they require a rich ecosystem of existing knowledge on which to base new ideas and innovation. They require capital to turn ideas into reality, that capital being just one of the many exports that cities provide. In turn, as innovations and products emerge in cities, these are added to a city’s exports, growing its markets for additional goods imported from elsewhere.
Every city is, in this way, deeply interconnected and reliant on the success of the cities that came before. What’s curious is that Jacobs doesn’t define the city in terms of scale; rather, to be considered a city (as opposed to a large town), an agglomeration must have the capacity for economic self-generation – in other words, it must be able to sustain itself through this innovative process of adding new work to old work, innovating at every increment.
There is no end to the potential growth that might emerge from cities. In Jacobs’ words: ‘once we stopped living like other animals, on what nature provided us ready-made, we began riding a tiger we do not dare dismount, but we also began opening up new resources – unlimited resources except as they may be limited by economic stagnation.’ The potential growth stemming from cities is precisely because they draw on more than the immediate resources provided in their vicinity. Rather, cities grow, replacing imports and imports, through human ingenuity, talent and the application of ideas to concrete problems.
It has often been proclaimed, particularly in the environmentalist movement, just like the Malthusians that came before, that the human race faces an impending destruction for there comes a point at which we simply run out of resources. That is not the case, when one understands the process that Jacobs is describing. Planet Earth contains almost the same resources that it did twelve millennia ago when absolute poverty was the rule everywhere. In bringing millions of people together in one place and setting in motion this process of constant economic renewal and improvement, wealth was created as ideas about how to reorganise those same resources spread so much faster, setting off a process of ‘cataclysmic reciprocal growth.’
It’s hard to let go of old ideas in favour of new, sounder ones, especially when they are so deeply entrenched. Yet despite there being evidence, quite literally all around us, that it is cities that create growth, policy remains firmly grounded in the old paradigm. Policies aimed at spreading or redistributing wealth across nations as a way of developing them achieve nothing of the sort. It might provide temporary relief (more likely the gains will be captured by some vested interest) but does little to kickstart the self-generating, reciprocating growth process that allows cities to grow. Nor can industrial policy, subsidies to lure big enterprises, or tariff barriers create the growth or desired effects. Big companies, Jacobs goes at length to explain, are highly efficient because they are very vertically integrated. Yet the real growth engine for cities is smaller companies, operating with some level of slack that permits them to expand into new markets and carry out the process of adding new work to old (or in other words, further specialisation).
Then there is the countryside and rural areas. The Economy of Cities is brilliant because Jacobs’ shows us that their development is entirely dependent on the development of cities, and not the other way around. Cities, and the activities that occur within, are what produce the growth that is then expanded out into the countryside as space becomes scarce and new innovative uses for capital and land are found in cities. The success of our cities is therefore not a zero-sum game, it is something of importance to every single one of us.
Politicians, city planners and those in the development space ought to pay close attention to these. Growth cannot be bought; the only way to achieve it is to focus on cultivating its underlying drivers.
