The Economy of Cities

Offhand, one might suppose that large organizations with their many divisions of labor would be much more prolific at adding new work to old than would small organizations. But this is not so. In a large organization, nearly all the divisions of labor, no matter how many there are, must necessarily be sterile in this respect. The various goods and

We have been considering three different processes by which organizations can first become exporters: • They can add the export work to other people’s local work. • They can add the export work to different local work of their own. • They can export their own local work. The significant fact about these processes is that they all depend directly on

When humble people, doing lowly work, are not also solving problems, nobody is apt to solve humble problems.

Japan, reinventing its agriculture, has accomplished abruptly and rapidly what the United States did somewhat more gradually and Western Europe more gradually still. It created rural productivity upon a foundation of city productivity. There is no inherent reason why this cannot be done by other nations even more rapidly. Modern productive agricult

We might say of this way of launching a new exporting enterprise that the exporter adds an export to other people’s local work. The relevant local work consists of preexisting divisions of labor. To be sure, the new export work proliferates subsequent new divisions of labor of its own. But to begin with, it ordinarily depends heavily on local produ

The question arises as to why all cities do not replace their imports from time to time. Why do some, like Scranton, do so significantly only once while others, like London, do so again and again? The answer is that if a city stops generating new exports after an episode of import replacing, it will not earn many more imports to replace. It will no

Efficiency as it is commonly defined—and I do not propose to change its definition, which is clear and useful—is the ratio of work accomplished to energy supplied. We can speak of high or low rates of efficiency because, in any given instance, we have two relevant factors to measure: input of energy, and quantity and quality (value) of work accompl

Cities are indeed inefficient and impractical compared with towns; and among cities themselves, the largest and most rapidly growing at any given time are apt to be the least efficient. But I propose to argue that these grave and real deficiencies are necessary to economic development and thus are exactly what make cities uniquely valuable to econo

So what we have here, if this summary is correct, is another reciprocating system of growth, though more complex than the one described in the preceding chapter. Its workings can be stated this way: a city builds up its imports and thus becomes capable of replacing many of them. By doing so it becomes capable of generating more exports. It thus bui