GregWTravels
Active Member
Here's an article I read in the Financial Times when I was in London a couple of weeks ago. Thought it might be of interest to those here.
What have cities ever done for us?
By Tim Harford
Published: August 9 2007 18:44 | Last updated: August 9 2007 18:44
My wife grew up in the countryside. To the extent that I have ever grown up, I did so in a series of small towns. Now we live in London and we are always dithering about whether to stay put with our young family, or move out to the countryside.
It is a decision for us, of course, but it is a decision that affects others – and is affected by the mixed signals provided by the government’s involvement in schools, infrastructure and the planning system. To the extent that governments get involved at all, they should be defending cities, strengthening their infrastructure and allowing them, within reason, to grow. In the UK and to some extent the US, they seem determined to do just the opposite.
Most people would prefer to live in cities. We know that because they currently accept a big financial penalty for doing so. Once you strip out the effect of the higher cost of living in cities – chiefly housing and tax – average city wages are lower than those in the countryside and small towns. Daniel Gross, the New York writer, recently totted up the purchasing power of the New York dollar: a mere 61 cents; and higher New York wages compensate for less than half the difference. The Harvard economist Edward Glaeser finds that a similar pattern holds across the US: real wages are lower, not higher, in the bigger cities. I don’t propose to shed a tear for New Yorkers or Londoners here, just to point out that we are not in it for the money.
Many people wrongly think that our desire to gather in big cities comes with a big social cost. William Cobbett compared London, the “Great Wenâ€, to a seeping sore. Some of my rural friends think he was on target.
The irony is that cities are good for the planet. Recent headlines excoriating London for its poor record on recycling omitted the detail that Londoners produce less household waste than people elsewhere in the UK. Londoners have fewer cars. New York is much the same in this regard. Public transport may or may not work well in cities, but will never work in the countryside. And brute economic necessity keeps city dwellers in smaller, greener homes.
Cities are also hubs of commercial and technological innovation. Even the tools used on today’s farms were developed in places such as Chicago and Cambridge. Studies of patent data confirm that patents tend to spur other patents in the same region; studies of commercial innovation confirm that it is highly concentrated in urban areas. The arts, too, largely revolve around creative networks based in the great cities.
But apart from environmental frugality, innovation and the arts, what have cities ever done for us? There is one more thing and it is growing ever more important as global trade demands that our economies become more flexible: cities are resilient. Economies develop by changing; the process of change means that people are always being thrown out of work and always finding new jobs. That experience, never fun, is far less wrenching in a city than in a one-horse town. When a factory or a mine closes in a remote area, it can be an economic blow from which there is no coming back. In a big, diversified city, such closures take place constantly, but fresh jobs are far more likely to be on hand.
Every time a person chooses to live in a city rather than a small town or a village, she is preserving the environment for the rest of us, contributing to the concentration of people needed to spur commercial and cultural innovation, and adding to the resilience of the economy that surrounds her. For those of a mind to nudge the economy this way and that through the tax system, that is a case for government to be paying people to move into the cities.
But there is no need to go that far. First, we should address the anti- urban bias of many rich countries. Joe Gyourko, the real-estate economist, estimates that Manhattan residents are paying $7,500 a year each in higher housing costs because of the city’s stranglehold on building permits; even after Mayor Michael Bloomberg’s recent reforms, New York is building smaller apartment blocks than in the 1970s. The high prices drive people away from New York, an environmental and cultural disaster. London’s green belt has a similar effect, pushing economic activity away from London, where it is less resilient and less successful, and stretching commutes over longer distances.
Leaving aside the planning insanities, both the UK and the US do a splendid job of directing tax revenue away from the cities and towards the countryside. In 2006, Wyoming received almost six times as much anti-terrorism funding as New York, per person. Londoners contribute at least £1,700 ($3,450) a year more in tax than they receive in government spending. Wales, Scotland, the North East and Northern Ireland receive at least £2,000 per person more than they pay in tax. Rural mail, telephones and utilities are cross-subsidised by city-dwellers. And European Union farm subsidies are infamous.
People, of course, have the right to choose to live wherever suits them. But when they choose to live in cities, the rest of us benefit. Why, then, are we so keen to pay them to stay in the countryside?
The writer, an FT economics commentator, is author of The Undercover Economist
What have cities ever done for us?
By Tim Harford
Published: August 9 2007 18:44 | Last updated: August 9 2007 18:44
My wife grew up in the countryside. To the extent that I have ever grown up, I did so in a series of small towns. Now we live in London and we are always dithering about whether to stay put with our young family, or move out to the countryside.
It is a decision for us, of course, but it is a decision that affects others – and is affected by the mixed signals provided by the government’s involvement in schools, infrastructure and the planning system. To the extent that governments get involved at all, they should be defending cities, strengthening their infrastructure and allowing them, within reason, to grow. In the UK and to some extent the US, they seem determined to do just the opposite.
Most people would prefer to live in cities. We know that because they currently accept a big financial penalty for doing so. Once you strip out the effect of the higher cost of living in cities – chiefly housing and tax – average city wages are lower than those in the countryside and small towns. Daniel Gross, the New York writer, recently totted up the purchasing power of the New York dollar: a mere 61 cents; and higher New York wages compensate for less than half the difference. The Harvard economist Edward Glaeser finds that a similar pattern holds across the US: real wages are lower, not higher, in the bigger cities. I don’t propose to shed a tear for New Yorkers or Londoners here, just to point out that we are not in it for the money.
Many people wrongly think that our desire to gather in big cities comes with a big social cost. William Cobbett compared London, the “Great Wenâ€, to a seeping sore. Some of my rural friends think he was on target.
The irony is that cities are good for the planet. Recent headlines excoriating London for its poor record on recycling omitted the detail that Londoners produce less household waste than people elsewhere in the UK. Londoners have fewer cars. New York is much the same in this regard. Public transport may or may not work well in cities, but will never work in the countryside. And brute economic necessity keeps city dwellers in smaller, greener homes.
Cities are also hubs of commercial and technological innovation. Even the tools used on today’s farms were developed in places such as Chicago and Cambridge. Studies of patent data confirm that patents tend to spur other patents in the same region; studies of commercial innovation confirm that it is highly concentrated in urban areas. The arts, too, largely revolve around creative networks based in the great cities.
But apart from environmental frugality, innovation and the arts, what have cities ever done for us? There is one more thing and it is growing ever more important as global trade demands that our economies become more flexible: cities are resilient. Economies develop by changing; the process of change means that people are always being thrown out of work and always finding new jobs. That experience, never fun, is far less wrenching in a city than in a one-horse town. When a factory or a mine closes in a remote area, it can be an economic blow from which there is no coming back. In a big, diversified city, such closures take place constantly, but fresh jobs are far more likely to be on hand.
Every time a person chooses to live in a city rather than a small town or a village, she is preserving the environment for the rest of us, contributing to the concentration of people needed to spur commercial and cultural innovation, and adding to the resilience of the economy that surrounds her. For those of a mind to nudge the economy this way and that through the tax system, that is a case for government to be paying people to move into the cities.
But there is no need to go that far. First, we should address the anti- urban bias of many rich countries. Joe Gyourko, the real-estate economist, estimates that Manhattan residents are paying $7,500 a year each in higher housing costs because of the city’s stranglehold on building permits; even after Mayor Michael Bloomberg’s recent reforms, New York is building smaller apartment blocks than in the 1970s. The high prices drive people away from New York, an environmental and cultural disaster. London’s green belt has a similar effect, pushing economic activity away from London, where it is less resilient and less successful, and stretching commutes over longer distances.
Leaving aside the planning insanities, both the UK and the US do a splendid job of directing tax revenue away from the cities and towards the countryside. In 2006, Wyoming received almost six times as much anti-terrorism funding as New York, per person. Londoners contribute at least £1,700 ($3,450) a year more in tax than they receive in government spending. Wales, Scotland, the North East and Northern Ireland receive at least £2,000 per person more than they pay in tax. Rural mail, telephones and utilities are cross-subsidised by city-dwellers. And European Union farm subsidies are infamous.
People, of course, have the right to choose to live wherever suits them. But when they choose to live in cities, the rest of us benefit. Why, then, are we so keen to pay them to stay in the countryside?
The writer, an FT economics commentator, is author of The Undercover Economist
