The famous urban economist Glaeser calls cities the greatest invention of humanity, but why are cities so important?
Short answer: They are clusters. Clusters of ideas and economic activity.
Cities allow for a greater extent of specialization in economic activity because there is more of it. A doctor might not be able to specialize in pediatric neurology in a village, but they can do this in a large city, where there are a lot more doctors and a lot more patients. This allows them to get better at one thing and work more efficiently, one of the most fundamental ideas in economics. This allows for increased productivity and economic growth.
Also, cities allow for the exchange of different ideas and greater production of new knowledge as a result, Glaeser says they make us smarter. This has led to cities being centers of intellectual and cultural development.
However, these advantages are not infinite, Lewis Mumford, a historian renowned for his studies on cities, argues cities have gone through various stages in history. He says that after a while, the positive effects from clusters decrease, the negative effects from congestion overwhelm the benefits, and cities decline.
More recent ideas of cities suggest that cities are in a balance rather than a cycle, and the cities stop growing where the benefits equal the costs, like other equilibriums in economics. Also, it is claimed that through better urban planning, like better transport, cities can keep growing without falling into decline like Mumford argues they do.
In this article, I wanted to give a brief introduction to urban economics. If you want to explore the ideas discussed in this article in more detail, I'd recommend 'The Triumph of the City' and 'The City in History'.
Comments