Triumph of the City

by Edward Glaeser

  Artistic movements tend to develop in one place—like fifteenth-century Florence or nineteenth-century Paris. In eighteenth-century Vienna, Haydn passed his symphonic ideas to his friend Mozart and his student Beethoven. The great chains of artistic innovation forged by painters or composers who live together in dense cities bear a striking resemblance to the far more prosaic chain of urban innovations that gave us junk bonds, leveraged buyouts, and mortgage-backed securities.

  Pundits and critics have long argued that improvements in information technology will make urban advantages obsolete. Once you can learn from Wikipedia in Anchorage, why pay New York prices? But a few decades of high technology can’t trump millions of years of evolution. Connecting in cyberspace will never be the same as sharing a meal or a smile or a kiss. Our species learns primarily from the aural, visual, and olfactory clues given off by our fellow humans. The Internet is a wonderful tool, but it works best when combined with knowledge gained face-to-face, as the concentrations of Internet entrepreneurs in Bangalore and Silicon Valley would attest. Every one of Harvard’s economics students uses technology constantly, but they also get plenty out of face-to-face meetings with their peers and professors. The most important communications still take place in person, and electronic access is no substitute for being at the geographic center of an intellectual movement.

  The declining cost of connecting over long distances has only increased the returns to clustering close together. Fifty years ago, most innovators played on a local stage. High transport costs limited one’s ability to make money quickly from selling a good idea worldwide. Today, traders in London or New York or Tokyo can instantly exploit a mispriced asset halfway around the world. The death of distance may have been hell on the goods producers in Detroit, who lost out to Japanese competitors, but it has been heaven for the idea producers of New York and San Francisco and Los Angeles, who have made billions on innovations in technology and entertainment and finance. Even when the financial world flails in one of its recurring downturns, we should be confident that its collective intelligence will eventually produce another boom.

  Countries still make wars, and governments slaughter their own citizens. Much of the world is still poor, while many in richer countries are less happy than they could be, and everyone’s environment is at risk. To face these challenges, humanity needs all the strength it can muster, and that strength resides in the connecting corridors of dense urban areas. The fact that we need our cities so much makes me optimistic about their future. The world recognizes the value of new ideas. People still flock to cities to get the skills they need to succeed. As those skills are acquired, new ideas multiply, and innovations emerge.

  Ahead of us lies a new emerald-green age of cities, if we choose our policies wisely. Car-based living on the urban edge will surely continue, but it will be accompanied by denser development close to the urban core. We can build taller towers that give people plenty of space in the heart of downtown, but build them in a way that guarantees environmental sustainability and good sight lines and plenty of street life. We can make sure that everybody, not just the privileged few, can enjoy the pleasures of Manhattan or Paris or Hong Kong. But to achieve all this, we must encourage cities instead of sprawl. We must embrace the changes that drive great cities forward, instead of clinging to a stultifying status quo.

  No matter what we do, some people will never want an urban lifestyle. They will want, like Thoreau, to be surrounded by open space and green trees. No one who can afford such a bucolic life should be forced to live in a city. But far too many people live outside cities because of mistakes that our societies have made. We should not force urban growth, but we must eliminate the barriers that artificially constrain the blossoming of city life.

  Give Cities a Level Playing Field

  The central theme of this book is that cities magnify humanity’s strengths. Our social species’ greatest talent is the ability to learn from each other, and we learn more deeply and thoroughly when we’re face-to-face. I have also tried to show that the achievements of cities—whether in Brunelleschi’s Florence or Ford’s Detroit—benefit the entire world. Democracy and printing and mass production are only a few of the gifts of the city. The ideas that emerge in cities eventually spread beyond their borders and enrich the rest of the world. Massachusetts rise or falls with Boston just as Maharashtra rises or falls with Mumbai.

  Too many countries have stacked the deck against urban areas, despite the fact that those areas are a—if not the—source of national strength. Cities don’t need handouts, but they need a level playing field.

  Economists often advise individual businesses on how to better their bottom lines while they simultaneously decry industrial policies that would favor one firm over another. This may seem hypocritical, but it’s quite logical. Indeed, at the heart of economics is the belief that businesses work best by competing furiously in a market that the government oversees as impartial umpire. The same is true for cities. Competition among local governments for people and firms is healthy. Competition drives cities to deliver better services and keep down costs. The national government does no good by favoring particular places, just as it does no good by propping up particular firms or industries. It’s far better for companies to compete, and it’s also far better for cities to find their own competitive advantages.

  This belief in the market may seem hard-hearted, but it isn’t. I’m not against protecting the people who suffer as a result of this competition, and I certainly think society should do more for the least advantaged. Of course, my belief in reducing poverty is a personal opinion, not a matter of economic insight. Economics has much to say about income redistribution—Do taxes reduce efforts? Does inequality hurt growth?—but economists have no special wisdom about the biggest question: Is it right to take money away from richer people to give it to poorer people? That’s a matter for philosophers, politicians, and the hearts of voters. Economists can, however, point out that throwing resources at troubled firms or troubled cities is usually a terribly inefficient means of taking care of troubled people. Helping poor people is an appropriate task for government, but helping poor places and poorly run businesses is not.

  Cities can compete on a level playing field, but over the past sixty years, America’s policies have slanted the field steeply against them. In the areas of housing, social services, education, transportation, the environment, and even income taxes, American policies have worked against urban areas. Cities have managed to survive despite these disadvantages because they have so much to offer. Yet precisely because cities play such a critical role in the economy and society, we must eliminate the artificial barriers that hold them back. The world would be more productive and more just if our policies were more spatially neutral. I’ll return to spatial neutrality when I discuss policies toward declining cities and sprawl, beginning on page 255 below.

  Urbanization Through Globalization

  During the millennia since Athens attracted the finest minds of the Mediterranean world, cities have grown by attracting people from diverse cultures. The most successful cities today—London, Bangalore, Singapore, New York—still connect continents. Such cities attract multinational enterprises and international expatriates. Immigrants are often a vital part of their economic model, both at the top and the bottom ends of the pay scale, and the success of global cities depends on national policies toward trade and immigration.

  An open city can’t exist in a closed nation. At the start of the twentieth century, when Argentina was one of the world’s most open countries, Buenos Aires was a vibrant, international city full of English and Spanish and Italian and even Swedish entrepreneurs. Over the course of the century, Argentina closed its borders, and Buenos Aires became an insular place, whose beautiful older buildings reminded visitors of a more dynamic, cosmopolitan past. In every decade but one between 1790 and 1970, America’s urban population increased by more than 19.5 percent. It was only during the 1930s, when the economy
faltered and tariffs effectively closed borders, that America’s urban growth slowed dramatically.

  My father was born in Berlin in 1930, when Germany and almost all of its neighbors were reasonably democratic. The 1930s were a terrible economic period for the world, made worse by policies like America’s Smoot-Hawley tariff, which shut down international trade. As economies faltered, countries like Germany, Austria, and Spain moved from democracy to dictatorship. Eventually, Europe descended into the madness of war. The world devolved from an urban ideal of commerce and intellectual exchange to a battlefield where dictators glorified a feudal, agricultural past.

  The free flow of goods and services among nations is good for cities and good for the world. Restrictions on free trade will make it more expensive for Americans to buy everyday goods and will harm our major trading partners. We’re far better off allowing our consumers to take advantage of inexpensive foreign products and forcing our producers to adapt than we would be hiding behind tariff walls.

  Industrial policies like massive aid to declining industries threaten global trade and growing cities. For years, America has—to its credit—loudly denounced such policies. We have done our nation and the world much good by championing the principle that companies should compete on a level playing field without subsidy or protection. If America gives up on its principles and targets aid to domestic producers but not to foreign companies with plants in the United States, then we are implicitly discouraging foreign direct investment in our country. We’re also encouraging other countries to favor their own producers against Americans. It would be far better to stick to a policy that enables free trade and international investment everywhere.

  Immigration is also essential to urban success. The growth of New York and Chicago over the past two decades is largely due to the hundreds of thousands of immigrants who have come to those cities. Cities are good for immigrants and immigrants are good for cities.

  While the biggest beneficiaries of immigration into prosperous countries are the immigrants themselves, the United States has benefited enormously from all the talented people who have settled here. Cities especially benefit from an influx of talent, because foreigners help urban areas play their crucial role of connecting countries. A diversity of cultures also helps make a city more fun, as the proliferation of good Indian restaurants in London suggests. Cities, and the country as a whole, will benefit even more if we work, as Canada and New Zealand do, to admit more skilled immigrants.

  Over the past ten years, the dangerous specter of nativism has returned to America and parts of Europe. This sentiment is not new. In the 1840s, the American, or Know-Nothing, Party rose to oppose the increasing numbers of Catholic Irish and German immigrants. In the 1920s, the Ku Klux Klan appeared in Northern cities buoyed on a wave of anti-immigrant hysteria. I believe strongly that America became a great nation because of the stream of human talents that flowed to its shores before 1921 and that shutting down that flow after World War I was one of the greatest mistakes that the nation has ever made. Immigration from a poor country to a rich country may well be the best way to turn a poor person into a rich one, and over the course of history, immigrants from Alexander Hamilton to Google cofounder Sergey Brin have done extraordinary things in and for America. So far, opponents of immigration have failed to capture either party, and an immigrant’s son occupies the White House, but neonativism remains a threat. Developed countries would gain much by increasing the flow of immigrants into America, especially by increasing the number of H-1B visas, which allow skilled workers to settle here.

  Lend a Hand to Human Capital

  Education is, after January temperature, the most reliable predictor of urban growth, especially among older cities. Per capita productivity rises sharply with metropolitan area size if the city is well educated, but not if it isn’t. Cities and schools complement each other, and for that reason, education policy is a vital ingredient in urban success.

  In the United States in 2007, college graduates earned about $57,000 per year, and people with only a high school diploma earned about $31,000 per year. In other words, going to college is associated with an over 80 percent increase in earnings. The impact of education seems even larger when we look at entire cities or countries. As the number of college graduates in a metropolitan area increases by 10 percent, individuals’ earnings increase by 7.7 percent, no matter how educated they are. Among nations, an extra average year of schooling is associated with a 37 percent increase in output per capita, which is pretty remarkable, because an extra year of schooling typically raises individual wages by less than 20 percent. Some of the massive correlation between schooling and national productivity may reflect other, unmeasured national attributes, but I believe that the country-level returns from schooling are also high because they include all of the extra benefits that come from having well-educated neighbors, including a more reliable, less corrupt government.

  Thomas Jefferson wrote that “If a nation expects to be ignorant and free, in a state of civilization, it expects what never was and never will be.” The link between education and democracy is strong because education creates democracy, not because democracies invest more in education. For example, the post-1990 political history of the better-educated members of the Warsaw Pact, like the Czech Republic or Poland, has been much brighter than the path of less educated areas, like Kazakhstan. A study of compulsory-schooling laws across states found that people who got more education because of these laws become more civically engaged. Education doesn’t just improve a region’s economic prospects; it also helps create a more just society. Giving poor children a good education may be the single best way to help them become prosperous adults.

  While it’s easy to cheer for education, it’s hard to improve school systems. Thirty years of research suggests that just throwing money at the problem achieves very little. Smaller class sizes improve students’ test scores, but only slightly. Bigger results are achieved with early interventions, such as Head Start, but to really improve education, we need systemic reform, not just more cash.

  Recent research on charter schools in Boston and New York has shown spectacular gains for lower-income students who attend such schools. These results dovetail nicely with earlier research that showed the effectiveness of parochial schools in disadvantaged areas. Large state monopolies can provide good school systems, as shown by many European countries like France, but competition is even better. Even socialist Sweden has switched to a system that gives its children more choice.

  Cities succeed by encouraging competition and diverse innovations. Public school monopolies destroy both of those advantages. With enough money and competent administration, we might be able to create universal access to excellent purely public education, but that seems pretty implausible in the American context. Better schools seem more likely to come from policies that allow more competition and diversity in schooling, such as charter schools or choice within public school systems.

  The largest ingredient in school quality, just like in urban success, is human capital—the talents of the teachers. Research has uncovered huge gaps in effectiveness between the good ones and the bad ones. Charter schools often produce better results than public schools, in part, because they can select better educators. Teachers’ unions are right to argue that higher wages will attract better teachers, but they’re wrong to fight against tying teachers’ pay to performance. Any union that fights to protect poorly performing teachers is putting its membership ahead of our children.

  Other research shows that a school’s curriculum also matters. The move to increased math and science training, which began in the 1980s, seems to have improved the performance of students, especially the poorer ones. Our schools must focus on getting—and keeping—teachers of those skills, like numeracy, that are increasingly critical for success.

  For cities, investing in schooling yields two payoffs. Students acquire more skills, which eventually makes the place more productive. Better schools
also attract better-educated parents, who make the place more productive right away. The single best way to create a smart city is to create schools that attract and train able people.

  Help Poor People, Not Poor Places

  The dearth of education in many postindustrial cities helps explain why these places have had such trouble reinventing themselves. They’ve also suffered because their model of having vast firms in a single industry stunts entrepreneurship and innovation. Throughout American history, older areas have always been supplanted by upstart cities. In 1800, six of the twenty largest cities in the United States were in Massachusetts (Boston, Salem, Newburyport, Nantucket, Gloucester, and Marblehead). Only one of these places remained a major metropolis by the end of the nineteenth century, as the population moved west and built great cities along America’s inland waterways. The relative decline of the Massachusetts towns troubled their residents, but it was good for the country.

  Today, urban distress troubles the late-nineteenth-century cities that formed as those Massachusetts towns declined. The second half of the twentieth century hit these industrial cities hard, and the recent recession dealt them another blow. The people suffering in those cities deserve our support, but we should not freeze urban change or artificially forestall urban decline. People moved to the Sunbelt for good reasons, and there’s no reason why the country as a whole should try to restore Detroit’s peak population of 1.85 million. National government should try to reduce human misery, but it shouldn’t try to stop the great course of urban change. Those currents are just too strong to hold back, and there’s no reason to even try.