Our Cities Are The Engines That Will Propel Recovery

Harvard economics professor and author Edward Glaeser had an article in the Boston Globe last week about the economic importance of cities. This has long been a topic that's interested me. Last year, I finally got around to reading Jane Jacobs' Cities and the Wealth of Nations, which makes similar arguments to Glaeser's article. The main thrust of the book is that cities are the places where new ideas are made, and where the sustained economic growth of a nation occurs. It suffers for Jacobs never having been a trained economist, and generally seems overly pessimistic to me. Still, a worthwhile read for the ideas it brings up.

Glaeser brings these ideas to bear on our current situation:

“DURING ECONOMIC downturns, we begin to fear that we are entering a permanent period of decline. But we can avoid that depressing prospect if we recognize that a revival will not come from federal spending or another building boom. Reinvention requires a new wave of innovation and entrepreneurship, which can emerge from our dense metropolitan areas and their skilled residents. America must stop treating its cities as ugly stepchildren, and should instead cherish them as the engines that power our economy.

America’s 12 largest metropolitan areas collectively produced 37 percent of the country’s output in 2008, the last year with available data. Per capita productivity was particularly high in large, skilled areas such as Boston, where output per person was 39 percent higher than the nation’s metropolitan average. New York and San Francisco enjoy similar per capita productivity advantages. Boston also seems to be moving past the current recession, with an unemployment rate well below the national average of 9.8 percent.”

Interestingly, though, these cities where productivity per capita is highest are losing people relative to the Sunbelt area, where per capita productivity is much lower. In a post on the New York Times' Economix blog, Edward Glaeser (who apparently likes to spread his ideas around*) blames this on housing regulations. I'm not sure I'd single it out as the primary cause, but it would be nice to see cities like Boston take a more laissez-faire attitude toward building and zoning regulations. Which was the primary lesson I took from Jane Jacobs' masterwork, The Death and Life of Great American Cities, whereas the "New Urbanist" movement seems to have decided to ignore the process and create regulations to achieve a result that looks the same. But that's a rant for another day.

*Actually, I'm guessing it's because he's got a book, The Triumph of the City, coming out.