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Friday, November 9, 2012

The Triumph of the City: How Our Greatest Invention Makes Us Richer, Smarter, Greener, Healthier, and Happier

In 2007, for the first time in history, the share of urban world population surpassed its rural counterpart. According to estimations by the United Nations Population Fund, in 2030 urban population will represent about 60 percent of the total world population. This process is being driven largely by the remarkable economic performance of the developing world.

Many argue that this trend is not only environmentally unsustainable but also socially harmful. Cities are viewed as places of huge social inequalities, unhealthy modes of living, and unfriendly environmental practices. Although this view is mainly present among the critics of capitalism, it is widely entrenched in public opinion. Thus it strongly influences the regulations and policies regarding urban spaces.

One of the strongest opponents of this view is Harvard economist Edward L. Glaeser, whose Triumph of the City makes a persuasive defense of cities. As its subtitle suggests, he claims that cities are “our greatest invention” and presents the case that they make us not only richer, but also greener and healthier.

The book combines economic logic with sound research through the study of history, data, quantitative relationships (using econometrics), and direct observation from several case studies of cities. Glaeser provides a comprehensive and generally convincing treatment of his subject.

Cities thrive, Glaeser argues, because human beings are essentially social agents who need to be close to each other. This important and subtle idea is vividly present throughout the book. Unfortunately it is largely neglected, especially among policymakers devoted to the belief that they can centrally plan complex and emergent orders like cities.

Glaeser critically analyzes the most pressing urban problems and the government responses to them. The common denominator of bad and pernicious public policies is the lack of understanding of what cities really are: “cities aren’t structures; cities are people,” he writes. He proceeds to illustrate the law of unintended consequences of government interventions with many different examples involving welfare policy, environmental issues, and land-use planning.

The conventional view is that cities create pockets of extreme poverty. Glaeser suggests that cities, instead of making people poor, attract very poor people from the rural world with the prospect of improving their material conditions by giving them superior opportunities. Thus urban growth is how rural, and also total, poverty is reduced—and that is how it has been actually reduced historically. In this respect Glaeser states what he calls the great urban poverty paradox: “if a city improves life for poor people currently living there by improving public schools or mass transit, that city will attract more poor people.”

Thus policymakers face a dilemma. On the one hand they would like to improve the conditions of their poor citizens, but on the other they would not like to attract more poor people, thereby raising alarms due to increases in the standard poverty and inequality figures. Given how the political process works and the inherent difficulties of government intervention to do good, it is no wonder why these public policies end up hurting the poor more often than not.

Moreover, Glaeser claims, the solution to urban problems, whether they are due to pockets of poverty, traffic jams, or other causes, “is more likely to come from local initiative [such as from social entrepreneurs] than from federal policy.”

The book also directs the reader’s attention to urban environmental policies, where Glaeser again has a contrarian view, writing, “Manhattan and downtown London and Shanghai are the real friends of the environment. Nature lovers who live surrounded by trees and grass consume much more energy than their urban counterparts.” Glaeser calls for a smarter environmentalism that combines both good economic logic and evidence to avoid counterproductive policies based solely on wishful thinking.

However harmful the effects of urban planning in developed countries, they can be a matter of life and death in countries like India. For instance, Mumbai’s restrictions on building heights hurt the poorest people the most by preventing the expansion of the supply of affordable housing.

I wish the book had addressed the recent Free Cities movement, but still Glaeser’s book is highly recommended reading for anyone who wishes to understand better the city where he lives and the disastrous public policies that hurt him and his neighbors. In the end, readers will see cities very differently. And perhaps they will agree with Glaeser that “our culture, our prosperity, and our freedom are all ultimately gifts of people living, working, and thinking together.”

  • Ángel Martín Oro is director of the Economic Trends Reporter at the Instituto Juan de Mariana in Madrid, Spain, and a Ph.D. student in economics.