To Get America Growing Again, It's Time to Unleash Our Cities: A Guest Post by Ed Glaeser

Ed Glaeser is an economist’s economist — as smart as they come, driven by empiricism, with something interesting to say about nearly anything. He has just published a new book, Triumph of the City: How Our Greatest Invention Makes Us Richer, Smarter, Greener, Healthier, and Happier. Glaeser argues that cities often get a bad rap even though they are “actually the healthiest, greenest, and richest (in cultural and economic terms) places to live. New Yorkers, for instance, live longer than other Americans; heart disease and cancer rates are lower in Gotham than in the nation as a whole. More than half of America’s income is earned in twenty-two metropolitan areas. And city dwellers use, on average, 40 percent less energy than suburbanites.”

We’re pleased to offer the following guest post from Glaeser on the glory of cities. I hope you find it as enthralling as I did. For the record: Glaeser is the Fred and Eleanor Glimp Professor of Economics at Harvard; among his research topics are the economics of cities, housing, segregation, obesity, crime, and innovation. He writes regularly for the Economix blog. He is a senior fellow at the Manhattan Institute, and director of the Taubman Center for State and Local Government and the Rappaport Institute for Greater Boston.

To Get America Growing Again, It’s Time to Unleash Our Cities
By Ed Glaeser

Worries about the economy and the apparent waning of American dominance have been inescapable of late.? Whether reading about the creation of President Obama‘s Council on Jobs and Competitiveness, his State of the Union address, Hu Jintao’s state visit, general China-envy and anxiety or even Tiger Mom-induced guilt, the message seems the same:? we’re in trouble.? But sticking with China for a moment, it’s instructive to consider what’s behind its incredible development and its increase in competitiveness.? Simply put, China is urbanizing.? China’s cities take in about 17 million new people every year because places like Shenzhen and Shanghai provide a path out of rural poverty. The good news for any anxious Americans out there is that cities and productivity go together everywhere in the world — and of course that goes for the U.S.A. as well.

Cities are at the heart of a competitive and global future, but even though the evidence is all around us, and even though mounds of data stare us squarely in the face (our country would be 43 percent richer if every area was as productive as New York), we don’t seem to get it. We continue to think that economic recovery and growth means building roads to nowhere, and we hobble our cities with silly policies that advance the idea that the only American dream is a white picket fence in the suburbs.?? If we want America to start growing again, we had better unleash our cities.? And there are a few simple truths we need to acknowledge if we’re going to do? that.

  • Cities are people, not structures. All the subsidized building in the world is never going to bring back a single Rustbelt burg.? Cities only succeed if they have enough smart, entrepreneurial people.? The best predictor of which older, colder cities came back from the doldrums of the 1970s is the share of their citizens with college degrees in 1970. Boston reinvented itself? by connecting scientists, like the decidedly freaky Itzhak Bentov (who invented both diet spaghetti and the steerable catheter) with entrepreneurs, like the decidedly un-freaky John Abele (who turned Boston Scientific into an innovation powerhouse). Minneapolis is the wealthiest Midwestern metro area because its smart people make smart companies like Target and Medtronic. Being near smart people matters: people’s wages typically rise by about 8 percent as the share of their fellow urbanites with college degrees goes up by 10 percentage points.
  • Cities succeed because they make smart people smarter. Michael Bloomberg was able to make billions in information technology because he knew exactly what Wall Street traders wanted.? And he only knew what they wanted because he had been one himself. Cities enable us to crowd-source ideas — even when we have no idea what we’re looking for. All the ugliness over Facebook’s founding should remind us that new ideas are always collaboratively created, and that both the deepest and the most serendipitous interactions are still face-to-face. Cities are more important than ever because globalization and new technologies have increased the returns to being smart, and we get smart by being around other smart people.
  • Small firms are beautiful. Fifty years ago, the economist Ben Chinitz wondered why New York was doing so much better than Pittsburgh.?? He argued that huge companies, like U.S. Steel, had killed off any spirit of local entrepreneurship, while New York’s garment industry was a breeding ground for small start-ups.?? He was right, and places with big firms have done quite badly over the past 50 years, while places with small average firm sizes have tended to have plenty of job growth. Pittsburgh — blessed with plenty of education — is now looking a lot better, but there are plenty of places that still reflect the insights of Chinitz.? Detroit, for example, was the most innovative place on the planet in the early 1900s when it was a haven for small start-ups that supplied each other and financed each other and stole each other’s ideas.? The city became synonymous with stagnation when it came to be dominated by three vast car companies.
  • Schools, schools, schools. Chicago and New York have fantastic restaurants because new eateries are constantly opening, competing and closing.? But imagine how awful eating in Manhattan would be if every meal was provided by a vast, bureaucratic public food system. Taste would be as rare as trans fats.?? And yet that’s what we settle for when it comes to our children’s educations in our urban centers — we’ve handed America’s future over to lumbering public monopolies.? Unsurprisingly, this is why so many of the well-to-do either flee the city or send their kids to private schools, compounding the education crisis and widening the divide between the haves and the have-nots.? We need a school system that harnesses the urban advantages of competition and innovation.? We’ve already seen that charter schools can work wonders in cities, but do far less in suburbs.
  • Build, baby, build. Cities like New York and San Francisco thrive because they’re productive and fun, attracting millions of people over the years with the promise of one of the great urban gifts: upward mobility.? But increasingly, they’ve become unaffordable to the ordinary people that drive their innovations.?? If a city has plenty of brilliant people, then give them space to live and work. Don’t enact byzantine zoning codes or hand vast, architecturally undistinguished neighborhoods over to preservationists. There is no repealing the laws of supply and demand, and if successful cities don’t build they become expensive, boutique cities that are inaccessible to mere mortals.? When New York City was building more than 100,000 new housing units a year in the 1920s, housing stayed inexpensive. New York construction dropped dramatically from the 1950s to the 1990s, and prices rose accordingly. Chicago’s sea of cranes on Lake Michigan helps explain why average condo prices in the New York area are more than 50 percent more than condo prices in the Chicago area.? In this case, the city has much to learn from the Second City.
  • Smart environmentalists love skyscrapers. Henry David Thoreau‘s sylvan lifestyle led him to destroy more than 300 acres of prime woodland (courtesy of an accidental forest fire he sparked).? He would have done much less harm if he had lived in Boston.? Big-city living means less driving, and smaller urban apartments use little energy.? Electricity use is about 88 percent higher in the average single-family detached home than in the average apartment in a big building.? Simply put, there’s nothing greener than blacktop.
  • Stop subsidizing suburbs. We don’t need housing and highway policies that push people away from our productive cities.? Brown economist Nathaniel Baum-Snow found that every new highway built into a city reduced that city’s population by 18 percent. Our pro-homeownership policies, including the financial fiascos of Fannie Mae and Freddie Mac, implicitly push people out of urban apartments into suburban homes. The great housing bust reminds us that the government shouldn’t be bribing people with the Home Mortgage Interest Deduction to bet everything on the swings of the housing market.
  • Unleash successful cities, but don’t prop up cities in decline. Per capita output in Minneapolis is twice as large as in Flint, Michigan. We shouldn’t push people to stay in less productive areas.? The children pushed out of New Orleans by Katrina ended up having much better test scores than the kids who stayed.? And vast infrastructure projects make particularly little sense in declining areas, since the hallmark of declining cities is that they’ve already got plenty of infrastructure relative to people.? Detroit never needed a monorail to glide over essentially empty streets.? Great cities can shrink and still be great.
  • Get Over Jefferson. America is, remarkably, still held captive by a Jeffersonian ideal of yeoman farmers and country living.? The rest of the world, however, is not.? The rising powers of the developing world are seizing their urban futures — cramming smart people together, creating gateways for ideas, and building platforms for the serendipitous fortunes that proximity can provide.? Gandhi may have thought that India’s future was in its villages and not its cities — but India today is proving the great man wrong.
  • The world is flat — except for the brilliant peaks that we build together in our cities.?? Let’s continue to innovate and grow our species’ greatest invention here at home.? We may rediscover a little bit of our swagger while we’re at it.

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  1. Alby Z says:

    You mention that smaller urban living spaces use less energy, but you only take into account electricity usage, which is not the sort of thorough analysis I am used to from this blog.

    Even if the majority of suburbanites do not choose to do so, there is far more potential for people who have a modicum of outdoor space to utilize water collection/gray water usage, solar water heating and/or power (as well as wind and other alternatives), and home gardens and/or livestock (goats, pigs, rabbits, chickens). Any of these things can dwarf many of the purported environmental benefits of urban living (yes, i know there are such things as community gardens, but the sheer amount of space and therefore, productivity, available to the suburbanite is much greater). Looking down your nose at “country living” ignores the fact that if each individual/family relied more on the fruit of their own labor and less on the production and transportation of factory farms we would be far healthier in body and in environment than we are now.

    Add that to the environmental impact of the massive infrastructure required to run a city and this view indeed fails the “smell test”. Agree with Mike B that planning and centralization will deliver greater benefit than focusing solely on cities.

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  2. Miguel says:

    “Electricity use is about 88 percent higher in the average single-family detached home than in the average apartment in a big building.”

    The average single-family home is larger than the average apartment, and is home to more people.

    Since you specified “in a big building,” we can assume the differences are not so dramatic if you look at the type apartments commonly constructed outside city centers where the cost of land does not require developers to build high-rises (note many people like to be able to carry their groceries inside without taking an elevator ride).

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  3. tungbo says:

    Many fascinating ideas here with but one false note.

    I would classify the fiasco with Fannie Mae and Freddie Mac as rooted in their private ownership with implicit government guarantee model and not as rooted in a pro-home ownership policy. As far as city living vs suburban living, both the GSEs accept mortgages on co-ops and condos in cities like NY. It’s not the case that one is forced to move to the suburb if one wishes to directly own a home. Many other factors have greater weight in such choices than the mortgage guarantor.

    As for the insightful description of the “American Dream” of suburban tracts with white picket fences. I do believe the times are changing. Consider that there are no more shows like: “Mayberry R.F.D.”, “The Brady Bunch”, or “A Little House on the Prairie”. We DO get: “Sex and the City”, “iCarly” and “Weed”. We may be ready to say goodbye to the “Pleasantville” that never was.

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  4. JShaffner says:

    I feel that many of the posts seem to miss the whole point of the article, that cities exist and that we should get the most out of them. While there are several arguments about greener living that is possible on the outside, if we give a select parcel of land to each city dweller, we will lose the ability to support ourselves agriculturally let alone discount the additional infrastructure required to support them. So, all that aside, the fact remains that cities exist, will continue to exist and present a potentially underutilized capital in the form of their citizens.

    Manhattan is 14,500 acres and has a population of 1.6 million. Giving each resident a quarter acre plot in the suburbs requires 400,000 acres (more than half of Rhode Island’s total land area) not including the required infrastructure for housing, transportation, business, schooling ect. How can you make that environmentally friendly and economically viable?

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  5. Dave says:

    Does this person not look around him to see how the world works?

    For starters, New York is rich because it has Wall Street. Wall Street is rich because it sucks wealth away from virtually every other part of the country.

    Smart young people move to cities to get jobs, then move out when they are older because they have families. Cities are not places to raise families, unless you are ridiculously rich and can live in a gated compound and send your kids to private school.

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  6. XP says:

    Most of the comments are off-topic.

    The article is not making an argument about why the city is a better place to live, but that a city is an economic powerhouse because of entrepreneurial prowess. The proximity of people subsequently encourages the flow of ideas and thus broods economic growth.

    Where people prefer to live or where they are educated really have nothing to do the authors intent. He is simply saying that cities are just damn productive, so grow them.

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  7. Betsy says:

    To #3: It all depends on what you value. To me the quality of life in a city is higher precisely because of the pros you list. Granted, lack of planning to accomodate families can be a problem. But if you live in a good city you can get by without a car. Until you have lived without one, you don’t realize how much it costs both in dollars and in headaches.

    Regarding electricity use, without a doubt it is lower in apartments than in freestanding houses because you and your neighbor both have at least one less outside wall that needs to be heated or cooled. Same advantage in the city as in the burbs there.

    As far as suburban space being productive – the prettier the lawn the less green – lots of pesticides, herbicides, and excess fertilizer running off into our waterways. Next time you try to farm your suburban lot – lot line to lot line, take a good look at your neighbors’ faces.

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  8. Laura says:

    Of course, cities are greener! It’s not only electricity use, city dwellers drive less. They live closer to their jobs, are more likely to take public transportation, are less likely to own cars, etc. That means that the more people live in cities, the less oil we consume. And oil is a finite resource.

    City dwellers also live in smaller apartments. Which means they buy less furniture, and, generally, less stuff. That also reduces their overall environmental impact. Also, amenities like water and gas pipes don’t have to be built as far because people in cities live closer together.

    As far as the possibilities of home farming in suburbia, that sounds great in theory. In practice, most people usually go for environmentally destructive, water, fertilizer and pesticide intensive lawns.

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