Reading Cities and the Wealth of Nations: III

Chapters Four and Five of Cities and the Wealth of Nations deal with complementary phenomena - regions that farmworkers leave, and regions that farmworkers get kicked out of - and show how the health of cities predicts which phenomenon will occur.

In "Regions Workers Abandon," Jacobs visits several regions where life hasn't changed much, except with regard to population. She gets right to the point.

The difference between stagnant regions that lose populations and stagnant regions where people stay put is simply that people from places like Scranton, Wales, and the deserted parts of Ontario can have realistic hopes of doing better somewhere else and have the means to get there, while people in such stagnant places as Haiti, where most people stay put, lack a way of getting out or a place to go.

Ingeniously, Jacobs hits on a perverse way of proving her point. She focuses on Napizaro, a town in Mexico, that (at the time of writing, at least) looks as though its economy is improving because so many houses are in good shape, and the public infrastructure has been greatly improved. But the economy of Napizaro must be subsumed within the economy of North Hollywood, California, because that is where Napizaro's men go to work, usually in clothing factories. Their abandonment of Napizaro is qualified. They themselves have left, but their families remain behind. living on remittances.

Like the men of Napizaro, you will be asking why, given such industriousness, they could not do the same work closer to home. Why don't they build a factory in Napizaro? Jacobs reports that they have thought of doing so, but concluded that any factory would fail. The reason is, of course, Jacobs's thesis itself: "The skills and experience the men have acquired in Los Angeles are usable only in the context of a city economy with its nets of suppliers and its markets, not in this economically barren region." The men of Napizaro may know how to do the work of a clothing factory. But few if any of them have the skills required to build, operate, or manage a factory, or those required to sell its output.

Napizaro, in short, feels the pull of increased city jobs, and it appears to enjoy, through the remittances, city-generated capital (I shall argue that it doesn't). But it lacks markets and transplanted city work, and therefore has no need of production-increasing technology. Jacobs cites the heartbreaking story of Egyptian workers who eke out the savings, while working jobs in the Netherlands, to buy a car, say, and who go home to run their own taxi services. "The taxi ... eventually breaks down beyond repair, and in the meantime it hasn't earned its owner enough to finance a replacement." Persistence and industriousness are just not enough, which is why the great cities of the world are filled with very homesick workers.

Jacobs spends a bit more time on what she calls "Clearances." With clearances, it isn't the pull of city jobs that depopulates a region. It's rather a change in the region's agricultural life. Jacobs's two cases here are the Highlands of Scotland, which, beginning at the end of the eighteenth century, were cleared of subsistence farmers, to make room for pasturage for sheep; and the rural American South, where improvements in electrification and farm technology - paid for by centralized doles - led to the consolidation of farms and the elimination of many agricultural jobs. With no city jobs to absorb the people thus displaced, both clearances produced a lot of human disaster. Jacobs shows her fiscal conservatism in a mildly scathing paragraph about Robert McNamara and Gunnar Myrdal.

The [World Bank's] reconsidered approach, largely worked out by Robert McNamara, the former US Secretary of defense who was appointed president of the bank in 1968, was to concentrate heavily on improvements to rural life with the object of keeping rural people in their villages instead of displacing them. This was the approach also advocated by the late Gunnar Myrdal, the famous Swedish expert on poverty and poor nations. Myrdal's hope lay in the idea that there must be some way to improve yields of poor villagers and yet, at the same time, keep their agriculture very labor-intensive. Neither Myrdal nor anyone else, however, has found empirical means of accomplishing this. As a policy it was a wish, a problem that has remained without a solution.

"Technology and Clearances" has made me take a hard look at the use of the word "investment." Certainly we cannot have thriving economies without excellent infrastructures, excellent educational systems, and (nowadays) excellent health care. But these alone will not guarantee vibrant economies, and it's distracting to speak of expenditures on them as "investments." The investments that vigorous economies require are the very narrowly-conceived investments that people with capital make when they purchase equity or debt - part ownership (however small) or the right to be repaid at interest. These investments support markets, perhaps the most vital of Jacobs's five elements. People who expect to make money do not build factories where they're needed. They build them where they'll be profitable.

If there was one thing that distinguished Jane Jacobs from the start of her career as an activist, it was her distrust of planning. Certainly the examples of failed plans have only piled up since she took on Robert Moses in 1962. Nobody, Jane Jacobs is quite sure, is in possession of a crystal ball powerful enough to see tomorrow, much less the future. Planning has it all backwards. It is really an Ancient Roman idea that has nothing to do with healthy economies. At its zenith, the empire had a package plan for new territories, a sort of Instant Romanizing kit. Rome would pay for a handful of impressive public buildings erected on the margins of a forum. It would support the local potentate with Roman troops. The locals were to take things from there. The process has been described by Ramsay McMullen, in Romanization in the Time of Augustus. This sort of city-building, however, had little effect on local economies, which puttered on as before. The transformation was about power, not money. The economic life of the ancient world was so unlike our own - so much more limited - that it probably oughtn't to be spoken of as "economy" at all.

You can't anticipate vibrant economies. You can't set the stage and then invite them to leap out dazzlingly. If Jacobs is analyzing healthy economies, it is to show how ad hoc they are, how contingent, how improbable. Perhaps it will be possible, someday, to grasp the complexities of a healthy economy, to map the countless symbiotic relationships that prevent most participants from being powerful enough to cause the system to fail. That day lies well into the future. Until then, we should call our (no longer so) generous handouts what they are - handouts. Calling them "investments" is the worst sort of bizbabble. (June 2006)

Permalink | Back to Related Links | Portico

Write to me