
It's the cities, stupid – Jane Jacobs' macroeconomics (2005) - jedharris
http://www.zompist.com/jacobs.html
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dredmorbius
Jacobs was one of my University discoveries, in the late 1980s. Her views on
urban currencies led me to suspe t that the Euro wouldn't succeed. Her and
Margaret Thatcher's critiques are disconcertingly similar.

There are modern academics who've continued in a similar vein including a chap
from, if I recall, Harvard, who has a great lecture given in New Zealand on
urban vitality and innovation. Edward Glaeser:
[http://fixyt.com/watch?v=r3Mvz-Mg2_A](http://fixyt.com/watch?v=r3Mvz-Mg2_A)

[https://plus.google.com/104092656004159577193/posts/3uGHCweF...](https://plus.google.com/104092656004159577193/posts/3uGHCweFxEy)

And sadly, Jacobs is no longer with us, she passed a few years ago. But her
books and thinking remain powerfully vibrant and original.

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garrettgrimsley
> The Shah thought he was buying development, making Iran into an advanced
> nation. But all he was buying was a factory, though an immense one. What he
> needed in order to actually be developed was what he couldn't buy: the web
> of thousands of companies that together enabled to US to build that factory.

This brings to mind the economic development of southern Korea under the
Syngman Rhee and Park Chung-hee dictatorships. Rather than buying just a
factory with their available capital they used it to fund the expansion of
what are known as _chaebols_ , Korean firms involved in a wide range of
enterprises. You'll have heard of Samsung, Hyundai, LG, Daewoo, to name a few.
Those are examples of chaebols. To be clear, that system can have problems,
but it is an amazing contrast to courting transplants [0] or buying factories.

[0] [http://www.rgj.com/story/news/2014/09/04/nevada-strikes-
bill...](http://www.rgj.com/story/news/2014/09/04/nevada-strikes-billion-tax-
break-deal-tesla/15096777/)

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stcredzero
_The missing process-- the engine Jacobs finds for all economic life-- is
import replacement._

What does it mean for the US, when we can't keep up with our demand to import
qualified employees?

EDIT: _" A city region is used to change, is constantly innovating; a supply
region is not. It treats its resources as God's gift, a presumably eternal
windfall; it prepares only half-heartedly for the end of the boom, and when it
comes it's caught short."_

Substitute "city region" and "supply region" for something and "worker" and
maybe we have something that relates to another article about how workers rent
their resources for pay. (Which I can't find right now.) In other words, is
being a conventional worker like being a "supply region?"

Perhaps people are the opposite of cities? When people start to prosper, they
seem to be outsourcing tasks.

~~~
toomuchtodo
> What does it mean for the US, when we can't keep up with our demand to
> import qualified employees?

Fix our educational system and train our own citizens? Seems pretty
straightforward.

~~~
bluejekyll
Yes. People are generally so focused on lowering their taxes that they forget
what they pay for.

A simplified tax code, where it's still progressive, i.e. tiered, but no
deductions would get rid of the feeling that we're paying more than our fair
share because there would be fewer ways for people to game the system. It
would also potentially recuperate the waste on the tax preparation economy.

And for people who don't think taxes/money is the solution to the education
issues in the US, look at the difference between California's performance
before prop 13 and after prop 13 passed. Prop 13 capped the amount that taxes
could be raised on property for both individuals AND corporations, strangling
the educational systems main revenue stream.

~~~
vezzy-fnord
Here's Milton Friedman explaining why the first is politically unfeasible:
[https://www.youtube.com/watch?v=TruCIPy79w8](https://www.youtube.com/watch?v=TruCIPy79w8)

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jedharris
More recent research on networks of producers (for example Birmingham,
northern Italian textile firms, and silicon valley) supports her analysis in
many respects.

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kqr2
The San Francisco Bay Area is a huge economic engine, however, there is a
severe housing shortage which could potentially disrupt this.

What would Jane Jacobs recommend in this situation?

~~~
Bensch
She would likely correctly identify restrictive zoning as the culprit, and
recommend its elimination.

~~~
ktothemc
Unclear.

Jane Jacobs has a section in her seminal book on American cities about
"gradual" and "cataclysmic" money, which can wipe out a delicate neighborhood
ecosystem.

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duckingtest
The way I understood it: transaction costs matter much more than most people
think they do.

City is efficient because transaction costs (transport and communication
distance for workers and suppliers) are low. However, that's a function of
technology. The cost of communication is getting more and more independent of
distance; with full vr, it's going to be zero. Price of transport as function
of distance would get to zero with teleportation technology.

Unless I missed something, it seems weird that several books were written on
such a simple observation.

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jedharris
An excellent summary of her best work, which is unfortunately not very well
known. It is great to have the whole of her argument in one short post.

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mohanmcgeek
Anybody who has played _Civilization_ understands this intuitively.

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ep103
So where did she stand on IP and copyright?

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ep103
This was an awesome article. Great post

