The Economy of Cities

The economy grows in still another way: when imports are replaced, a city is almost sure to produce—for its own market—more of those things than it had previously imported. This happens because the very act of replacing former imports creates more jobs. Once Scranton began to produce tombstones, there were more jobs in Scranton for tombstone worker

The question arises as to why all cities do not replace their imports from time to time. Why do some, like Scranton, do so significantly only once while others, like London, do so again and again? The answer is that if a city stops generating new exports after an episode of import replacing, it will not earn many more imports to replace. It will no

If we were to measure the economic development rate of a city, we could not do so just by measuring its output in a year or any group of years. We would have to measure, rather, the additions of new work to its older output, over a period of time, and the ratio of the new work to the older work. Then, to speak of a low or a high development rate, w

We have been considering three different processes by which organizations can first become exporters: • They can add the export work to other people’s local work. • They can add the export work to different local work of their own. • They can export their own local work. The significant fact about these processes is that they all depend directly on

We now have in hand all the major processes at work in a growing city economy. First, the city finds in an older city or cities an expanding market for its initial export work, and it builds up a collection of numerous local businesses to supply producers’ goods and services to the initial export work. Second, some of the local suppliers of produce

Rural production is literally the creation of city consumption. That is to say, city economies invent the things that are to become city imports from the rural world, and then they reinvent the rural world so it can supply those imports.

Japan, reinventing its agriculture, has accomplished abruptly and rapidly what the United States did somewhat more gradually and Western Europe more gradually still. It created rural productivity upon a foundation of city productivity. There is no inherent reason why this cannot be done by other nations even more rapidly. Modern productive agricult

Offhand, one might suppose that large organizations with their many divisions of labor would be much more prolific at adding new work to old than would small organizations. But this is not so. In a large organization, nearly all the divisions of labor, no matter how many there are, must necessarily be sterile in this respect. The various goods and

So what we have here, if this summary is correct, is another reciprocating system of growth, though more complex than the one described in the preceding chapter. Its workings can be stated this way: a city builds up its imports and thus becomes capable of replacing many of them. By doing so it becomes capable of generating more exports. It thus bui