Better Together: Why Cities Are Man’s Greatest Invention and How We Could Fix them
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The urbanist and economist Edward Glaeser called cities “man’s greatest invention,” but cities have hit a bit of a rough patch lately. Why are cities so important to human life? What has gone wrong with them? And what can we do to make urban life better?
In a new book, “Age of the City,” Ian Goldin, a South African professor of development, and Tom Lee-Devlin, the business editor of The Economist, address these big questions. Unfortunately, the book is not an exemplar of expository or persuasive writing; it’s workmanlike and straightforward. If you know a little about cities and want to learn more, it’s a helpful start. But if you have time for only one book about cities, Glaeser’s 2008 masterpiece, “Triumph of the City,” is better in almost every way.
“Age of the City” is also a little too fond of central planning. The very nature of cities makes some degree of planning necessary, but when the authors’ solution to every problem is more government, that’s a bias worth noticing. Such a bias is not surprising from a writer for The Economist, which edged away from its classical liberal past after a change of ownership in 2015 and became more conventionally statist. It’s a little more surprising coming from Goldin, who collaborated with the libertarian-leaning Glaeser in the past.1
Cities and the human story
I’ve titled this review “Better Together,” perhaps an odd choice given that it’s a mostly forgotten slogan used (successfully, it turned out) by the United Kingdom to keep Scotland from breaking away. The superficial reason for my choice is that “Better Together” is the title of the authors’ concluding chapter. But the real reason is that human society makes progress – economic, scientific, artistic – when we interact with each other frequently and intensively. And that’s what cities are for.
The larger the number of interactions, the more impressive the outcome. In a 2017 review of Geoffrey West’s remarkable book Scale, I wrote (summarizing his findings):
“human connections grow 15% faster than city size due to proximity....[E]ach doubling in the size of a city results in a 115% increase in each of the key economic variables such as wages, patents, and industries...[b]ecause commerce is transacted more rapidly...”
But there is more to it than proximity. The larger the city, the more skilled and experienced the people you connect with. They’re also more able to fund your business or give you a job that’s better than the one you left behind. So urbanization is how progress is made.
Goldin and Lee-Devlin agree: “No country has ever become rich without urbanizing. Only cities can create the types of jobs that are capable of lifting a large share of the population out of subsistence.”
Since the late eighteenth century, per capita incomes have risen thirtyfold globally, and a hundredfold in the rich world. The great economist and historian Deirdre McCloskey calls this transformation the “Great Betterment.” If this betterment is to continue and accelerate – and I believe it will despite some bumps in the road – the needed innovations will take place almost entirely in cities because of the scaling effect I just described. And we must work on the problems currently plaguing cities because that’s where most of us will live. Today, 55% of the world’s population is urban and, according to Goldin and Lee-Devlin, that number will rise to two-thirds of the world’s population by 2050.
The story of cities, then, comprises much of the story of human life. It is impossible to tell that story in one book – much less a book review! – so I’ll be condensing my ideas far more than I’d like. A book I am writing, “Richer, Greener, Better,” will contain some chapters that expand on this review.2
Why cities are crucial for innovation
When Glaeser, echoing the literary critic and urbanist Lewis Mumford three-quarters of a century ago, describes cities as mankind’s greatest invention, what is he talking about? Aren’t the alphabet, the wheel, government, banking, printing, the steam engine, the electric motor, the telephone, the automobile, the airplane, and the internet even greater?
We don’t know who first made a wheel, but all these other inventions depended on people being physically brought together so they could interact. It’s obvious from that fact that large human settlements have a significant advantage over small ones. And innovation accelerated as more and more people lived in villages, then towns, then cities.
In recent decades, radical improvements in communication technology have made physical proximity to other people less important. I have friends from whom I have learned a lot but whom I have never met face-to-face, only on the internet. This phenomenon is what Marshall McLuhan was talking about in the 1960s when he foresaw the emergence of a “global village” of people peacefully working and socializing from afar.
Yet, while some aspects of the global village have come to fruition, it has not brought peace to Israel, Ukraine, or Sudan. And wealthy Taiwan is threatened by moderately wealthy China. That is not the pastoral idyll that McLuhan envisioned. The decision to live together in cities has not reshaped human nature so much that we can count on enduring peace. But it has helped.3
What’s the matter with cities these days?
After a helpful introductory section in which Goldin and Lee-Devlin describe the historical and current advantages of cities – “The first requisite of happiness is that a man be born in a famous city,” wrote Euripides more than 2,400 years ago – the authors home in on urban problems. Today’s woes resemble those that have plagued cities since Euripides: The poor flock to them hoping to get rich, but many stay poor; diseases spread more easily than they do on the farm; crowding and traffic impose unwanted costs; and large, diverse groups of people are cumbersome to govern.
Adding to this litany are new problems: coastal cities threatened by rising sea levels due to climate change, and – a more immediate concern – the sudden decline in the importance of downtowns due to remote work.
Cities as wealth incubators
Let’s start where the authors do – with an examination of cities as wealth engines. Look at the scene below and tell me what you see: utter chaos, a representation of Africa’s material poverty, or wealth being created?
All three answers are correct, and capture what city life is about. The second and third answers describe why people move to cities – to escape destitution or even possible starvation, and to get ahead in the world. The resulting chaos is ugly to some and beautiful to others. But a lot of wealth is being created. Those in the rich world rarely think of Lagos in a positive way, but David Pilling, writing in the Financial Times reports:
“Since the federal government moved to Abuja in 1991, [Lagos,] Nigeria’s former capital and commercial hub of roughly 20m people has taken off... The city is the centre of most of the country’s manufacturing and home to a pan-African banking industry as well as a thriving music, fashion and film scene that reverberates around the continent. More recently, it has become a tech hub to rival Nairobi’s so-called Silicon Savannah. The Lagos economy is significantly bigger than that of the whole of Kenya, east Africa’s most dynamic country, with a nominal per capita income of more than $5,000, more than double the Nigerian average."4
We were wondering when the much-awaited African economic miracle was going to start. I guess it already has. But when rapid growth rates collide with a large and very poor population, the resulting inequality becomes spectacular. I’ll return to that topic later.
I now comment on some of the authors’ views and recommendations, chapter by chapter.
‘Leveling up’
To remedy the inequality that obviously plagues cities, Goldin and Lee-Devlin adopt the Tory slogan, “leveling up,” which has become so commonplace that it has come to mean “whatever the speaker likes.” But it has a specific meaning: improving the living conditions of the less fortunate without dragging down the successful. Like most good ideas, it sounds simple but it is not easy.
Goldin and Lee-Devlin observe that the conventional pattern of the poor inhabiting central cities, surrounded by the wealthy in suburbs, is reversing. Young urban professionals, they note, are restoring downtowns and industrial districts; meanwhile, poverty is moving outward. The authors propose some policies that would help the dispersed poor.
The problem is that this is 40-year-old news. In most urban areas, gentrification of inner cities has slowed or even reversed. While there are still many wealthy suburbs, interspersed between them are low-income communities, often dominated by immigrants who won’t remain low-income for long.
While helping the poor is always a priority, the most pressing urban problem in the First World at this time is the hollowing out of downtowns due to the reduced need for office space. This trend was underway before COVID-19, but, with working from home now a mass movement, it’s a major issue. An incredible 37% of San Francisco’s central business district office space is vacant – and that city is a magnet for talent. Other cities have it worse.
Further, if you go back a century, when older American cities were growing fastest, the wealthy lived in the central city. That’s the truly classic pattern, mirroring urban design in Europe and elsewhere. The concentration of the poor in central cities is mostly an American, post-World War II aberration.
Superstar vs. laggard cities
Goldin and Lee-Devlin note, as most of us have, that some cities are booming beyond belief – sucking in high-priced talent from all over the world and becoming frightfully expensive – while many more are lagging, losing population, industry, jobs, human capital, and financial well-being. The biggest winners are technology and finance capitals; in second place are those specializing in education, medicine, and government. The biggest losers – in the U.S. at any rate – are the old manufacturing cities, some of which are reverting to farmland (Exhibit 2).5
Technology, finance, education, and medicine are worthy pursuits, deservedly making up the lion’s share of U.S. GDP growth. But not everyone is cut out for these activities. While these sectors could grow, higher education is overbuilt (we churn out more degree holders than the job market needs) and the cost of medical care is straining personal and government budgets. A move to revitalize smaller cities must include other economic sectors.
The obvious candidate is manufacturing, but how to achieve that is a topic for another day and another book review. Suffice it to say it’s hard for the high-wage U.S. and U.K. to compete with middle-wage countries, especially China, with its extraordinary technological sophistication. There’s no obvious remedy for the problems of our lagging cities, and high tariffs won’t help – they’ll just make all American consumers noticeably poorer while making a handful of newly employed factory workers a little richer. Not a good trade.
In addition, some sensible-sounding efforts to boost small cities have backfired. Fast trains from the countryside to London, for example, have mostly wound up helping London by making it easier for people in faraway British cities to commute there.
Remote work
I’m writing this from “home,” which at the moment is an airplane above Kansas. This atomization of the work force is very much a mixed bag: It reduces my commuting costs and increases my productive time, but I rarely see a colleague except on a video screen. Worse, the serendipitous encounters that occur in an office – or more to the point, a city full of offices all in close proximity – never happen. Remote work makes it easy to tread water but difficult to forge ahead.
How does remote work affect cities? Goldin and Lee-Devlin, who subtitle their remote-work chapter “The Threat to Cities,” see an upside and a downside.
It’s hard to find the upside of remote work for cities, although there are obvious upsides for workers (until the lowered productivity shows up in their paychecks). But Goldin and Lee-Devlin have ideas:
“[W]orkers’ homes will be the ‘spokes,’ while the ‘hubs’ will be cutting-edge office buildings in prime urban locations... The overall result is likely to be both a decline in the amount of office space required and a “flight to quality,” with demand shifting from older, lower-grade buildings to newer, premium ones.”
This forecast is already starting to come true. Steve Luthman of Hines, a leading real estate company, has noted the widening price difference between top-quality, tech-friendly “Class A+” office buildings and mere “Class A” properties, which are very nice ones but without the latest bells and whistles. 6
I cannot see how this can be good for cities, which are full of Class B and C, as well as “mere” Class A, buildings, except possibly in the extreme long run, where the quality of new and existing buildings adjusts to meet changing demand.
Beyond the rich world: Fantastic growth, but inequality on steroids
Reflecting the Nobel Prize-winning economist Robert Lucas’ comment to the effect that, once you’ve thought about how to make poor countries rich, it’s hard to think about anything else, Goldin and Lee-Devlin are concerned (as they should be) with the problems of cities in the developing world. After all, that is where wealth creation is most needed, and is where the greater part of it will take place.
I’m usually not too upset about inequality because, if everyone has enough to get by, why should anyone care if there are some billionaires in the population? Taking away their money won’t help the less well-off one bit, and would probably hurt them. That is how I see the situation in the rich world, where even the poor are somewhat well-off by global standards.7
But in the rest of the world, extreme inequality means, for some, an existence that we barely recognize as livable. The two West Jakarta street scenes below are about 500 feet apart.8
Houston, we have a problem.
In an economy growing as fast as Indonesia’s, it’s easy to overlook the fact that some people are incredibly, cruelly destitute. (And it’s easy for some Westerners to forget that Indonesia is, in many ways, a modern economy – its PPP-adjusted GDP per capita, about $14,000, is about what China’s was in 2014.) Extremes of wealth and poverty like these, one right on top of the other, breed resentment and create political conditions that hamper growth. The extreme deprivation (not the wealth) is also just morally unacceptable. No one, anywhere, should have to live in the filth shown in the picture on the left.
Goldin and Lee-Devlin’s suggestion for improving this situation begins with the economist’s standard one – that of more growth:
“The conventional “modernization theory of informal settlements suggests these places are a natural and transient phenomenon in the process of economic development. As incomes rise, makeshift houses are replaced by planned developments with...roads, sewerage, water, electricity.”
But they have their doubts. The authors continue:
“Yet there isn’t much transience in the informal settlements of many poor countries today. In countries like Bangladesh they continue to grow, and even in moderately prosperous countries like Brazil their size has remained stubbornly consistent for decades.”
Of course, individuals can come and go from these settlements – and it’s well-documented that they do – while their size of the settlement stays the same. That is scant consolation, however, for those who are trapped there for a lifetime.
Hopeful suggestions from a celebrated Peruvian economist
In thinking through possible remedies, Goldin and Lee-Devlin reflect on the recommendation, by the celebrated Peruvian economist Hernando de Soto, that granting property rights to residents would free them:
“[P]eople in these places often lack the incentives or financial means to invest in improving their homes...due to the absence of formal ownership rights and a high risk of eviction.... [T]o make property markets work more effectively..., granting land titles is seen as the solution. These would not only make it possible for those living there to invest in improving their homes, but also allow them to more easily take out loans for setting up small businesses or educating their children.”
This may sound like useless dreaming to someone living on the filthy riverfront in Exhibit 3, and conventional slum clearance and relocation might be the best bet for them. But giving poor people property rights that they can leverage to make enough money to become non-poor is, as a general principle, a brilliant idea. (They are, after all, rights that the rest of us take for granted.)
Even if not everyone is helped, a great many people will be, and the experiments that have been tried are encouraging. In Argentina, for example, squatters given title to land they had long occupied “substantially increased housing investment, reduced household size, and enhanced the education of their children,” according to two respected researchers.9
This result is far from universal, and may not apply across cultures or income levels (with the very poorest, sadly, lagging behind). However, having no good solutions other than conventional poverty relief, maybe countries with the greatest urban inequality problems ought to try DeSoto’s.
Don’t overlook the importance of beauty
Because cities are now home to more than half the world population, and that number will increase, the story of cities is very much the story of humankind. A book review cannot possibly do justice to all the currently relevant issues. Those I haven’t covered – but that are touched on in Goldin and Lee-Devlin’s book – include public safety, the housing shortage, the fertility crash, climate change, sprawl, and disease (we still haven’t conquered all the illnesses that spread in crowded places). My forthcoming book will address some of those. But I have room here for one more topic that escaped the authors’ attention: beauty.
Cities should make people want to live in them. They can do that by offering high wages, interesting diversions, or connections to friends and family. But the city shown below doesn’t make me want to live in it even though it offers all those things.
It’s Seoul, South Korea. It is not poor. People come there from all over South Korea to make their fortune, or just to get the kind of job that only big cities offer. But it’s ugly. Is it any wonder that it has the lowest birth rate in the world, 0.55 children per woman (one-quarter of the replacement rate of 2.1)? If you had kids, where you would put them?
This nightmare is what many people fear when planners say we need more urban density. They’re against it and should be. So, what should we do?
Every urbanist has his or her own answer, so I’ll focus on two (who happen to be architects): Nils Freckeus of Sweden and Sebastian Treese in Germany. Europe solved the density versus beauty problem centuries ago, and tourists come from all over the world to revel in the splendor of its oldest, densest cities.
Inspired by this fact, and deeply admiring of tradition, Freckeus and Treese, working independently, designed the stunning new buildings shown below. They’re intended for middle-class residents, not the rich. At least to the American eye, the buildings look like they’re inhabited by the rich, but that is because the rich outbid everybody else for the few beautiful buildings that exist. The non-rich would live in similar buildings if they were abundant.
Builders and their clients whine about the cost of ornamentation and good design, but the finer details of Freckeus’ and Treese’ buildings, which used to require expensive craftsmen, can now be 3D-printed at high speed and low cost – and the building materials used in these designs are conventional ones, not expensive custom stuff. We can do this.
If we adopt the New Urbanist or New Traditional design values of Freckeus and Treese, we’ll alleviate the housing shortage and make cities more beautiful at the same time. (The cities also must be made safe and kid-friendly, a tougher assignment than hiring good architects.) We may not know exactly how to achieve these compound goals, but given the desire to do so and the right incentives, we at least know what direction to head.
Conclusion: We’ll be living in densely populated cities, so let’s do it well
Because more than 8 billion people must share the living space afforded by a small planet (and this number will rise), we’re going to be living together in cities whether we like it or not. So we’d better make density work for us instead of against us. That means following many of the prescriptions in Goldin and Lee-Devlin’s book while keeping a watchful eye on the size and power of government. We can also learn from other urbanists such as Jane Jacobs and Edward Glaeser (who are better writers than Goldin and Lee-Devlin). We’d do well to adopt Deirdre McCloskey’s love of bourgeois values and practices.10 And we should make our cities more beautiful.
Making cities work for us also means controlling crime, a bare-minimum requirement and top priority – civilized life cannot coexist with violent lawlessness. Barriers to building more houses and apartments need to be lowered. And, to give people stuck at the bottom a chance at a decent life, we should consider Hernando DeSoto’s market-oriented remedies for extreme poverty, as well as more conventional modes of relief.
Why do we live in cities? As I’ve already noted, given the size of the world population, we don’t have much choice. But there’s a more profound reason, stated by Ian Goldin’s one-time collaborator Edward Glaeser in his masterpiece “Triumph of the City”:
“The strength that comes from human collaboration is the central truth behind civilization’s success and the primary reason why cities exist.”
To advance the welfare of mankind, we must nurture cities. Let’s get to work.
Laurence B. Siegel is the Gary P. Brinson director of research at the CFA Institute Research Foundation, economist and futurist at Vintage Quants LLC, and an independent consultant, writer, and speaker. His books, Fewer, Richer, Greener, Unknown Knowns, and (soon to be released) On Progress and Prosperity, explore ideas in economics, investing, environmentalism, and human progress. His website is http://www.larrysiegel.org. He may be reached at [email protected].
Endnotes
1 Not that cities can function without government. The main reasons for having a government – to protect property rights and pay or charge for public goods and externalities – come to the forefront when managing a city. What economists call “neighborhood effects,” the influence of my behavior on my neighbors’ wealth and well-being, are more important the closer the neighbor. In cities, neighbors are close by and numerous. A city cannot run on the principle of “every man for himself.”
2 “Richer, Greener, Better” will be a sequel to (not an update of) my earlier book, “Fewer, Richer, Greener” (Wiley, 2019).
3 The decrease in both individual and state-sponsored violence over the centuries is documented in Steven Pinker’s “The Better Angels of Our Nature.” Critics have objected that the 20th century was the most violent in world history – but, considered as a proportion of world population, that assessment is not accurate.
4 https://www.ft.com/content/ff0595e4-26de-11e8-b27e-cc62a39d57a0
5 Not kidding about the farming. See Glausser, Anne (October 17, 2011). “New Urban Farm Joins Cleveland's Central Neighborhood.” WVIZ-TV. Retrieved July 18, 2019.
6 Presentation at Foundation Financial Officers Group, Minneapolis, October 16, 2024.
7 Pathological cases, such as the unsheltered homeless in the U.S., aside. That is not a poverty problem – it is primarily a drug abuse and mental health problem.
8 Based on Google Street View and my ability to judge distances on it. I have not been to Jakarta.
9 Galiani, Sebastian, and Ernesto Schargrodsky. 2010. “Property rights for the poor: Effects of land titling.” Journal of Public Economics, Volume 94, Issues 9–10 (October), pp. 700-729. The original owners of the land were compensated by the Argentine government.
10 See, for example, Deirdre McCloskey and Art Carden’s “Leave Me Alone and I’ll Make You Rich” (2020). This short book, which I reviewed here, also here, is a summary of McCloskey’s 1,700-page trilogy “The Bourgeois Era,” an excellent but daunting suite of three books setting forth her philosophy.
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