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The thesis of this book is that cities are the primary drivers of economic development Her main argument is that explosive economic growth derives from urban import replacement Import replacement occurs when a city begins to locally produce goods that it formerly imported eg Tokyo bicycle factories replacing Tokyo bicycle importers in the 1800s Jacobs claims that import replacement builds up local infrastructure skills and production Jacobs also claims that the increased production is subseuently exported to other cities giving those other cities a new opportunity to engage in import replacement thus producing a positive cycle of growthIn the foremost chapter of the book Jacobs argues that cities preceded agriculture She argues that in cities trade in wild animals and grains allowed for the initial division of labor necessary for the discovery of husbandry and agriculture; these discoveries then moved out of the city due to land competitionfrom Wikpedia


10 thoughts on “The Economy of Cities

  1. says:

    It blows cobwebs from the mind wrote Christopher Lehmann Haupt when he reviewed the book for the NY Times back in 1969 Forty four years later and just after completing a two year masters program in urban planning I would say that it made my brain explode in spite of how un academic that soundsJacobs is best known for her 1961 book The Death and Life of Great American Cities which sharply critiues the planning practice at the time In the face of urban renewal in general and Robert Moses in particular Jacobs described in great detail a new way to view cities Although some of what she described is debatable she's not a fan of parks much of what she describes as good city fabric has become accepted by today's planning profession Her mixed use Complete Streets are now what cities across America are clamoring to recreate As a result nearly everyone with an urban planning degree or just an obsessive love of cities has read it The Economy of Cities goes well beyond what cities should look like and describes the reuirements for economic development Although it's not a perfect toolkit it is certainly full of food for thought about how urban economies can be fostered or suelched valuable lessons for the thriving New Yorks and the dying Detroits alike The later chapters give clear examples of the evolution in how differently types of work is done how cities are shaped by innovation and the importance of all the local support businesses for attracting a wide range of export firms Most incredible is the central premise of the text Cities are primal and rural is secondary This isn't a point of condescension but rather a concept as bold as the Copernican Revolution was in its time and disturbingly under discussed in conversations about rapid urbanization and the planet's urban future Rather than imagining that the farms began first and people eventually formed cities a very Garden of Eden view of the world Jacobs demonstrates that cities not by our standards but certainly dense concentrations of people formed before any romanticized version of a farmer emerged I cannot understate the value of reading this book to planners policy makers business people inventors artists and thinkers


  2. says:

    In this book Jane Jacobs brings her creative mind and sharp wit to bear on the uestion of how cities grow economically While there's a lot of wisdom here it demands an unusual style of reading Jacobs was not a scientist or economist in a formal modern manner; rather she had in common intellectually with the natural philosophers of an earlier era That is rather than proposing a hypothesis and testing it against econometric analysis Jacobs observes keenly and discerns a mechanism that explains what she sees Early in the book Jacobs offers an explanation of how the first cities came to initiate economic growth It reads like a modern version of social contract theory philosophically credible but not really true in an historical senseJacobs' writing is always stimulating and she offered key insights into social order decades before they became widely appreciated For example the final chapter of Jacobs' better known Death and Life of Great American Cities discusses cities as iterative nonlinear systems decades before those became a hip topic of academic study in the 1990s In The Economy of Cities Jacobs correctly predicts the rise of services and also nails the function of the Long Tail as a source of economic growth But she uses her own term 'growth through product differentiation' which she identifies as the next major form of economic growth after an economy exhausts the possibilities of mass productionThe core point of the book is that cities develop new work first by manufacturing goods that displace imports and later by budding new products or services off of current manufactures Overarching efficiency in production spells the death of this process triggering economic stagnation Jacobs notes the importance of venture capital that is willing to take risks and bankroll new industries without trying to rationalize them or add them to existing calcified corporate structures There's a lot as well including some assertions about poverty and population growth that have since been shown to be wrongAs a thinker and writer Jacobs is in a category of her own I find reading her books takes real concentration and sometimes several re reads despite the lucidity of her prose Her combination of liberal values and deep distrust of government so reflective of her struggles against Robert Moses and modernist planning jars in the context of current political fights in which liberals are generally trying to protect government from right wing attacks Nonetheless Jacobs' grasp of patterns of order spatial and economic is so rich and so incisive that it justifies the effort to absorb it fully


  3. says:

    Jane Jacobs has established herself as an accidental expert on urban theory Her Death and Life of Great American Cities meant to be a defense of her Greenwich Village neighborhood from the designs of Robert Moses over time revealed itself to be an anatomy book for the city as a beingJacobs takes her pedestrian but profound musings to describing the workings of a city's economy She approaches economics twice in Cities and the Wealth of Nations and this her earlier book The Economy of CitiesThe book opens with a takedown of the anthropological theory that cities are a progression from an agricultural society that became industrious and wealthy Jacobs says that is nonsenseRural development actually develops from cities Jacobs theories the process is backwardsCities don't often sprout directly atop fertile agricultural land Typically they form off to the sides of these places and for much of human history those places were usually waterwaysCities serve as depots to send and receive goods as well as trading posts to form local markets for goods The markets enable a division of labor that allows for goods to be produced and processes to be created These goods and processes then are sent to rural areas in trade for raw materials to be processed and shipped elsewhereThis explanation serves as the springboard for her theory of city economics She calls the term import replacement Jacobs says an early city serves as a repository for goods and processes and the first step is for workers to start figuring out the goods and processes and learn to produce them or find purposes for them In economics and business this is the term known as value additionJacobs cites Japan as an example of import replacement saying the country became an industrial powerhouse starting from the small base of bicycle production Early on Japan would import bicycles for sale Over time workers learned how to fashion replacement parts for the bicycles from locally available goods From then on workers added to skill sets to build complete bicycles on their own to satisfy local consumption then export domestically made bikes to other markets Bicycles would need to be imported less but that opens up a spot for other goods and processes to be imported The process repeatsJacobs even has her own euations and flow charts in an appendix Keep in mind she is not an academic but it is a foundation for economists and others to testShe also dwells upon how the process can slow stop and put cities in decline Amazingly her theory of decline was probably little better than a guess but she foresaw deindustrialization in 1969 when far credentialed politicians business leaders and economic leaders were and still are baffled by the collapse of industry They thought prosperity was a given and that a factory was a hallmark of how far industry has comeJacobs on the other hand says a large factory marks the twilight of an economic phase and it saps rather than enhances the import replacement process Jacobs in 1969 rightly called the secular decline of industrial cities like Detroit and Rochester She holds up two British cities industrial Manchester and diversified Birmingham to show what has happened Manchester's enormous factories were powerful magnets and generators of jobs supplies and capital Then other factories opened elsewhere and Manchester's became outmoded expensive and noncompetitive Meanwhile sleepy Birmingham never had a dominant industry but instead a small patchwork of diverse producers Birmingham kept on thriving at least in 1969 as of 2013 Great Britain is wholly dependent on London as a dynamic city regionJacobs speaks to a general audience and her theories are cursory and meant to be accessible to a lay reader Though over time Jacobs' sandbox musings have been incorporated in the academic world and even economics If you want to know a vital economic function pick up The Economy of Cities The follow up Cities and the Wealth of Nations published 15 years after this volume gives another microscopic look at the building blocks of the city economic process


  4. says:

    Jacobs begins this book countering the claims of accepted anthropologyarcheology theory that cities are built on a rural economic base Jacobs instead suggests that much of what is considered rural work and what rural economies have to offer is in fact exported from cities to the hinterland This is no small claim since practically everyone disagrees with her She illustrates her thesis well with specific examples throughout history ranging from the ancient Turkish city Catal Huyuk to the innovation of the brassiere by Ida Rosenthal in the 1920s to the Post WWII Japanese economy What all of these examples have in common is how new work begins and Jacobs' claim is that new work thrives in city economies This is because cities are inefficient and this inefficiency allows for innovation effecient economies such as those of company towns are inherently prone to economic stagnation because they are not import replacing The book is interesting because it parts ways with so much conventional thought that is still so accepted in universities And also because I think Jacobs is right With the US economy currently being in the dumps it is easy to see why after reading this book American institutions particularly the American government has destroyed cities in the post WWII economy eg Johnson's Great Society legislation Instead of encouraging short term inefficiency trial and error through loans to small business to achieve long term prosperity the government has instead practiced protectionism of big industries steel auto through subsidies therefore stifling innovation and stagnating the economy if proof is needed look at the current economic mess that is Michigan Had the government provided small business grants and loans instead of big business subsidies the US would be far powerful because of innovation in world wide markets Jacobs is prophetic in the ending chapter suggesting the idea of differentiated production production that is somewhere between mass production and craft manufacturing as the way of the future It has in fact proven to be in many sectors including the garment music and service industries I could write but I spare you Favorite uote of this book To seek causes of poverty in this way is to enter an intellectual dead end because poverty has no causes Only prosperity has causes p 121


  5. says:

    Another great read from Jane Jacobs Jacobs continues developing her uniue views on human nature and society exploring concepts like spontaneous order the centrality of trade be it ideas goods ect to human life and how our natural habitat the city works As in The Death and Life of the Great American Cities she takes what may seem like a dry subject in this case urban economics and makes it downright engrossing With insights on subjects ranging from class conflict to early urban development to social welfare policy anyone interested in human society would be remiss to pass up The Economy of Cities


  6. says:

    illuminating at points and clearly written but also kind of unimaginative and conservative plus as a city person I feel dirty for liking a book that is 80% sorry guys but the country as we know it is an economic and cultural backwater that exists to support the real centre of human life the city and I can prove it; she makes a convincing case but I also feel like it panders to my biases and I should go read something about the decadence of the cities for a real intellectual challenge


  7. says:

    The Economy of Cities is a short and compelling investigation into two uestions what makes cities form and why do some cities grow while others stagnate and shrink? To the first uestion Jane Jacobs argues that cities formed directly out of hunting and gathering societies and then added agriculture to their economic activities This overturns the agricultural primacy theory that is normally taught in schools that small bands of hunters and gathers gradually settle down in agricultural settlements which then expand to villages and onwards to cities I had never given this uestion much thought before but by the end of the first chapter Jacobs completely converted me to her point of view The second part of the book is longer and less interesting but still worth a read if you're interested in urban studies Jacobs argues that vibrant cities develop by adding new kinds of work to their existing economies then develop these new kinds of work into export businesses serving other cities and use the imports gained from this export work to develop still kinds of businesses in a repeating cycle As readers of Death and Life of Great American Cities would expect she's a strong proponent of the role of small businesses in creating new lines of work and generally finds that large businesses lead to stagnant company towns like Detroit Prescriptively she's in favor of venture capital and government support for small business development and cutting support to large but moribund old line industries Along the same lines she favors measures that encourage the development of small business in ghettos and disadvantaged countries and is generally against welfare programs that breed economic dependence One argument for the importance of this book many of the ideas presented here have become widely accepted and implemented in urban development efforts in the US— although sometimes not with the energy and vigor that Jacobs would have liked


  8. says:

    From Richard Florida Author of The Rise of the Creative ClassI have so many favorite books but there are three people that really influenced me The first and most important is Jane Jacobs and her book The Economy of Cities which I think everyone who works in business has to read What the farm and agricultural land was for our first great American economy what the industrial company was to the great Industrial age what the Great American corporation was to our economy the city is now the social and economic organizing unit of our time If you want to understand how to be successful as a business you have to understand not only your company but your city that you live in


  9. says:

    A good read with an interesting and persuasive argument but tended to get too bogged down in case studies showing the same thing over and over again in a different way The thesis was defended well enough half way in and the rest of the book was just of the same I feltGood arguments not excellently written


  10. says:

    Although this book has some really great information it was much too wordy It could have been 150 pages and still provided the same information